Growing Your Business

Protecting your Small Business from Identity Theft is Critical and a Legal Necessity.

by
Lee Reams II
on
8/31/2015
Protecting your Small Business from Identity Theft is Critical and a Legal Necessity.

According to the Federal Trade Commission, identity theft continues to be the #1 consumer complaint, with 2,582,851 complaints logged in 2014 alone. The methods identity thieves use to get private data are diverse, ranging from phone scams to computer hacking to even stealing computers outright.

One of the easiest ways for criminals to gain access to personal information, like Social Security numbers, passwords, credit card numbers and personal data, is business computers. If an older computer is simply thrown out in the trash, it is an environmental hazard and could lead to easy picking for identity theft criminals.

There are a number of software tools that thieves can use to access a hard drive. They can search for private data that they can use to highjack your clients’ and your own business’s confidential information. The potential liability from losses and potential client disruption is vast.

If crooks accessed private company information, they could alter business records with government agencies, open lines of credit, impersonate company officers and much more.

If your clients’ information is accessed because you did not properly dispose of client data, you open yourself up to legal action and possible federal prosecution. Never mind the loss of your reputation and possible business losses. Tax refund fraud and other schemes are prevalent and growing threats. The more the crooks know about your clients, the greater the damage could be.

According to Gary Scott, COO of E-Waste Security, “witnessing the physical destruction of digital media is the only way to verify that digital data is destroyed. Shredding is the most effective form of physical destruction followed by bending, drilling and hole punching.

Having a third party erase or ‘wipe’ hard drives exposes companies to unnecessary data breach risk. 

Hard drives can be

1) lost or stolen in transit,

2) copied by unauthorized personnel until erased and

3) erased improperly or not at all.”

Mr. Scott also addressed the legal issues surrounding data protection. “There are several Federal and State laws that address the handling and destruction of consumer and health information. Gramm-Leach-Bliley Act (GLBA) for customer information by “financial institutions” (landlords, employers, insurance agents and anyone brokers; Health Insurance Portability and Accountability Act (HIPPA) for Protected Health Information (medical records and information); Fair Credit Reporting Act for the handling and disposal of information in ‘consumer reports.’”

Mr. Scott added that “the Environmental Protection Agency (EPA) and California Department of Toxic Substances Control (DTSC) regulate the disposal of e-waste.”

The Federal Trade Commission has free data security resources, including videos and free publications, to help businesses across the country protect their customers and meet their legal obligations. In addition, the EPA has a general information page on e-waste for used electronics.

When selecting a hard drive destruction and recycling vendor, make sure it meets the following processes:

  • Follows EPA guidelines for e-waste and component recycling
  • Has no landfill or export policy
  • Uses chain of custody documentation
  • Provides hard drive shredding versus drilling or punching holes
  • Issues a certificate of destruction for your records

Using a National Association for Information (NAID) certified vendor will help protect you from most missteps. NAID developed this useful data destruction vendor website that allows you to search for a certified data destruction professional near you.

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Lee Reams II

Lee Reams II

CEO

I am a tax and business news junkie who has spent the last 20 years developing and executing "best in class" word-of-mouth marketing campaigns for tax and accounting professionals. With TaxBuzz and CountingWorks we have taken that same commitment to quality content directly to the consumer. Keeping you up-to-date with the latest tax law changes, business growth tips and planning strategies to help you reach your best financial outcome.

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