Know your records disposal responsibilities

BY Roy Maurer

How does your company dispose of sensitive information?

Are records containing personally identifiable information (such as medical records, financial or background check reports, and employment applications) thrown in the trash? Where do records go from there? Is the trash securely shredded or thrown into an unsecured dumpster? What about sensitive electronic information?

In an effort to protect the privacy of consumer information and reduce the risk of fraud and identity theft, the Fair and Accurate Credit Transactions Act, enacted in 2003, directed several federal agencies to adopt rules regarding the disposal of sensitive information.

The Federal Trade Commission’s (FTC) Disposal Rule became effective in 2005.

“The way in which your company disposes of sensitive information can have significant consequences on your business,” said Al Saikali, an attorney and co-chair of Shook Hardy & Bacon’s Data Security and Data Privacy Practice Group, based in Miami.

“Companies that fail to educate themselves and comply with these laws governing the secure disposal of sensitive information face significant risks of regulatory investigations, fines, potential civil lawsuits, bad publicity and brand damage,” he told SHRM Online. “Also, it simply makes good business sense that a company would want to ensure the security of [its] proprietary, consumer, employee and other sensitive information.”

Two companies learned this the hard way recently when they discarded personally identifiable information in unsecured dumpsters and were fined more than $100,000 by the FTC.

In October 2012, the FTC charged that PLS Financial Services Inc. and The Payday Loan Store of Illinois Inc. failed to take reasonable measures to protect consumer information, resulting in the disposal of documents containing sensitive personal identifying information — including Social Security numbers, employment information, loan applications, bank account information, and credit reports — in unsecured dumpsters.

According to the complaint filed by the FTC, the companies violated the agency’s Disposal Rule and the Gramm-Leach-Bliley Act’s Safeguards Rule, which requires financial institutions to develop and use safeguards to protect consumer information.

The companies settled with the FTC after agreeing to pay a $101,500 fine and to establish what will likely be an expensive and comprehensive information security program, said Saikali. The program will include having regular independent, third-party audits every other year for 20 years and adopting a number of recordkeeping and compliance monitoring requirements, he said.

According to the FTC, the standard for the proper disposal of information derived from a consumer report is flexible and allows the organizations and individuals covered by the rule to determine what measures are reasonable based on the sensitivity of the information, the costs and benefits of different disposal methods, and changes in technology.

Although the Disposal Rule specifically applies to consumer reports and the information derived from consumer reports, the FTC encourages those who dispose of any records containing a consumer’s personal or financial information to take similar protective measures.

It should be noted that the rule does not specify for employers the length of time such records must be maintained or whether they must be destroyed at all.

FTC-recommended disposal practices include:

            Destroying or erasing electronic files so that consumer information cannot be read or be reconstructed.

            Shredding, burning or otherwise destroying paper documents so that consumer information cannot be read or reconstructed.

            Hiring a certified contractor specialized in document destruction after performing due diligence of the company’s operations and security policies.

Some experts recommend making a site visit to verify that a shredding plant has the security necessary for handling sensitive documents, but a visit can be cost- and time-prohibitive.

Saikali suggested that the hiring company at least build a provision into the service agreement giving it the right to audit the vendor’s security safeguards. 

Employer takeaways

First, assess how your company disposes of sensitive information, Saikali said.

Next, identify the policies and procedures your company has adopted to ensure that sensitive information is disposed of securely. The law contains a subpart specifically focused on the implementation and monitoring of policies and procedures that deal with the destruction of materials. Make sure every employee is aware of how to handle, store and shred confidential information.

“Do your employees comply with existing policies and what ‘checks’ are in place to maximize compliance and minimize risk?” Saikali asked. “When was the last time you trained and reminded employees about the proper way to securely dispose of sensitive information? Do you know how your vendors and business associates, with whom you share sensitive information, are disposing of that information?”

If you are not sure whether your company’s safeguards meet the legal requirements for secure disposal, he said, it might be wise to retain counsel.

Roy Maurer is an online editor/manager for SHRM. Follow him on Twitter @SHRMRoy.

©2013 SHRM. All rights reserved.

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What’s the biggest current threat to your business?

A conservation ad that’s just plain weird

BY Ken Clark

“Rip the Drip” may not be a household name. But he’s a positive influence on household water consumption.

Rip is the star of a series of public service announcements from the WaterSense program and its three–time WaterSense Partners of the Year, Kohler Co. and Lowe’s.

In the commercials, Rip shows up in people’s homes when water is being wasted. He reminds them just how weird it is to use more water than you need. Appropriately, the announcements are called "Wasting Water Is Weird."

You can watch the videos here.


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What’s the biggest current threat to your business?

A mixed bag of home channel merchandise


IPG Decorative Concrete Line of Tapes
Intertape Polymer Group has targeted the decorative concrete industry with a new line of products. The line consists of five products: DC Ultra2in1 is a new double-sided masking tape designed to act as a barrier to an overlay application; DC Blue is a blue masking tape designed to prevent chemical bonding resulting in sealer failure; DC Orange is a clean removal duct tape designed to work on rough surfaces; DC Grout is reinforced tape for strong grout line pulls; and DC Drape is a film that prevents overspray and provides solvent-resistant protection. (

Bosch Angle Grinders with Protection Switch
Bosch Angle Grinders with Protection Switch only operate as long as the switch is being pressed. If the switch is released, the machines immediately shut down. The “Protection Switch” is designed so that the switch can be operated over the entire length of the handle, regardless of whether the angle grinder is held at the front, back or in the middle. As a result, users always have full control over the tool even in difficult working positions. The angle grinders offer power ratings of 1,100 to 1,500 watts. (

Makita 18V Impact Driver
Makita’s new 18V LXT Lithium-Ion Brushless Quick-Shift Mode 3-Speed Impact Driver is the latest addition to the company’s 18V cordless line up. The tool features Quick-Shift Mode, an automatic electronic controller that downshifts and reduces rotation and impact speed prior to driving the screw into place. It is engineered to minimize screw thread stripping, screw breakage and damage to work. (

Kuhn Rikon Classic Snips / Classic Mini Snips
Kuhn Rikon’s new Classic Snips and Classic Mini Snips can cut almost anything, whether for cooking, gardening, crafting or cutting packaging open quickly. Self-sharpening and rust-free, these stainless steel snips feature a spring-loaded design, ultra sharp shears and serrated lower blades. The Classic Snips and Classic Mini Snips feature ergonomic easy-grip handles for left or right-handed use. They lock shut for safety and storage. (

Weyerhaeuser Hardwood Edge
Hardwood Edge is the industry’s first OSB floor panel specifically engineered for use under hardwood floors. The panels offer enhanced dimensional stability and high density that provide for outstanding fastener holding — ideal for the demands of hardwood floors. Along with improved fastener-retention and high density, the panels include patented Down Pore drainage technology: Three specially shaped grooves at panel ends that eliminate standing water to reduce the potential for water absorption. That built-in drainage reduces edge swell, virtually eliminating the need to sand. (

Heat & Glo New Ultra-Slim REVO Fireplace Series
The Heat & Glo REVO Series features slender, 7-in.-deep profiles and the patented Razor burner. Once a hole is made in the wall and SLP venting pipe is set, the lightweight units are hung on mounting brackets. The fireplaces are available in square, linear and vertical models and can easily be installed during any stage of building or remodeling. (

Arrow Steel Sheds
Arrow Shed’s new sheds offer a range of durable, affordable vinyl-coated steel storage solutions. Along with protection for garden tools and other outdoor gear, Arrow Steel Sheds feature vinyl-coated steel that will not warp, split or crack. (

Moen Faucets with Antimicrobial Product Protection
Moen is using technology from Microban International, which specializes in built-in antimicrobial product protection, to help keep faucet surfaces visibly cleaner and resist stain-causing bacteria. Microban technologies are engineered to work continuously and won’t wash off or wear away. The new Ashville and Walden collections are sold exclusively at The Home Depot. (

Jenn-Air Ventilation System
The telescoping Jenn-Air Accolade ventilation system is arc-shaped, with a curved, sculptural profile designed to place ventilation power even closer to the cooking source than traditional systems. The 36-in. Accolade system is equipped with a pressure-stabilizing in-line blower system that removes cooking smoke at a rate of up to 1,200 cubic feet per minute. The inline blower system minimizes operating sounds. (

Larson 6-Outlet Waterproof Power Distribution System
Larson Electronics has added a 6-outlet portable low-voltage spider box to its line of power distribution systems. Equipped with six waterproof outlets, the system combines the benefits of a step-down transformer with the flexibility of a spider box, enabling operators to split a single 120 or 240 VAC input into six 12/24VAC or 12/24 VDC outlets. (

Husqvarna All-Wheel Drive Mower
The new Husqvarna HU800AWD features All-Wheel Drive technology, designed for uneven terrain and the toughest mowing conditions. It features a heavy-duty steel deck and a Honda GCV 190 engine. Its wheels feature an aggressive tread pattern, which provides additional traction and maneuverability. The All-Wheel Drive walk mower is available exclusively at Lowe’s and authorized Husqvarna dealers nationwide. (

John Deere 50G and 60G Compact Excavators
The John Deere 50G and 60G Compact Excavators are the newest models of the G-Series line. The 50G and 60G are outfitted with a DOC/DPF after-treatment device to meet the Final Tier 4 emissions requirements. Both models incorporate the auto-idle feature that slows engine speed when the pilot-control levers are momentarily released. (

Milwaukee 18V Compact Impact Wrenches
As part of the new M18 FUEL line, the new tools feature Milwaukee’s exclusive combination of the PowerState Brushless Motor, RedLink Plus Electronic Intelligence and RedLithium 2.0/XC4.0 Battery Pack to deliver up to two times more runtime, up to 50% more torque and a proprietary 3-Mode Drive Control feature. The new PowerState Brushless Motor works harder, lives longer and converts energy into power more efficiently. RedLink Plus Intelligence hardware and software allows the user to choose between three fastening modes with the Drive Control feature. (

Aqua Mizer Toilet Flush System
The new version of the Aqua Mizer Adjustable Flush System delivers the same leak prevention and flush volume reduction as the original, features a new design that has fewer parts and enables the product to be sold at about half the price of the original. The system’s leak-prevention feature gives the user full control of the water entering the tank. The new chlorine-resistant flat flapper is adjustable to set the optimum flush volume for each toilet. (


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What’s the biggest current threat to your business?