Paper shredding business piles up

Long before investigators zeroed in on document destruction at Enron Corp. and its accounting firm, Arthur Andersen, shredding paper has been big business.

And not just to hide embarrassing evidence. Tampa Bay area paper shredding companies say concern about privacy and identity theft have made more companies aware that they can't leave papers with Social Security numbers and credit card account numbers lying in a Dumpster for thieves to salvage.

The Enron-Andersen debacle, they say, hasn't cut into the shredding business, although one company has temporarily lost a client: Arthur Andersen.

Shred-it of Tampa was told in January that Andersen would suspend using its services until the investigations are over.

"They had to put all shredding on hold," said Steve Harris, general manager of Shred-it. "We understand that obviously." From time to time, he said, other companies have halted shredding in the wake of an investigation or a lawsuit.

In the 1980s, there were about two dozen document destruction companies nationwide. Now, there are 500 to 600 companies that get their main source of revenue from shredding, according to Robert Johnson. He's executive director of the industry's own trade group, the National Association for Information Destruction.

The recent publicity about document shredding is "a double-edged thing," Johnson said. "It tends to reinforce -- this is the negative part -- people's image that if someone's shredding something that they have something to hide. In reality, the vast majority of shredding that goes on, goes on to protect people's privacy."

According to the Federal Trade Commission, identity theft was the leading consumer fraud complaint in 2001. Often thieves will steal from neighborhood mailboxes or gather confidential data through scams on the Web. But corporate garbage cans also are fertile sources.

Companies also are destroying documents to protect their own business secrets.

"We've seen just as big a rise in demand for these services because businesses are much more conscious of how they are protecting and, how they are discarding, information about their business that would hurt them from a competitive standpoint," Johnson said.

At Confidential On-site Paper Shredding in St. Petersburg, company president Jane Herman warns against throwing "your business out in the trash."

"If you have Social Security numbers, Medicaid numbers, employee information, medical records, you don't want to be throwing that in the trash," Herman said. "And if in doubt, shred it anyway." It's safer than just tossing it into the office's recycling bin, she said.

Document shredding companies -- which also destroy X-ray film, microfiche, microfilm, videotapes and computer discs -- will pick up containers of documents and destroy them off site or shred them right at the customer's door. Many companies have trucks equipped with an industrial-strength shredder and compactor that can chew up a three-ring notebook binder and crumple it like a paper towel. The paper, often mixed with other shredded materials, can still be recycled once it is theft-proof.

Russell Foisy, a sales representative for Secure On-Site Shredding in St. Petersburg, said companies have been inclined lately to make sure the shredding gets done on their premises. "I just think it's companies analyzing their own situation and not wanting to take any chances," he said.

Shredding company executives were reluctant to reveal what they charge, but the going rate appears to be about $50 for the first 300 pounds of paper.

Government regulations also have helped the document destruction industry.

One of the recent pushes to preserve the public's privacy came last year when the government ordered hospitals, doctors, pharmacies and insurance companies to protect patients' medical records. The order followed the 1996 Health Insurance Portability and Accountability Act, designed to restrict disclosure.

Gerald Haas, vice president of sales and marketing of American Document Destruction Corp. in Tampa, said the 1999 federal law that gives customers a chance to stop financial institutions from trading or selling customers' private information to other business interests, has helped fill up truckloads too.

Document destruction companies seldom get blamed when there's a controversy over shredding papers, mainly because they don't know what's on them and they only do what a client tells them to.

"We never will give advice (on what to shred) because we don't have a clue," Haas said.

-- J. Nealy-Brown can be reached at nealy@sptimes.com or at (727) 893-8846.

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