This From: PioneerPlanet / St. Paul (Minnesota);  Monday December 28, 1998
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http://www.pioneerplanet.com/business/biz_docs/035432.htm


                As identity theft becomes a greater problem, bank customers
                are concerned with how their financial institutions dispose of
                confidential information. In response, banks are toughening up
                their security -- but some are more diligent than others.

By
Amber Veverka
KNIGHT RIDDER NEWS SERVICE

In today's Internet-linked, bar-coded world, a criminal can steal your
money or wreck your credit with more sophisticated tools than ever before.
But those high-tech crimes can start with a tool a little more mundane and
yet devastatingly effective: a crumpled piece of paper in the bottom of a
trash can.

Banks are more concerned than ever about keeping customer information
secure, and that concern isn't just reserved for the glitzy stuff like
Internet banking.

Large banks have shredded or pulverized paperwork for years, and a growing
number of smaller financial institutions are doing the same.

One of the biggest threats to customers is identity theft, in which the
criminal assumes the victim's financial identity and drains bank accounts,
racks up bills or commits other fraud.

The Secret Service arrested 9,455 people last year for crimes involving
identity fraud, up from 8,806 in 1995, according to a U.S. General
Accounting Office study.

The cost of those crimes to victims: $745 million in 1997, up from $442
million two years earlier. Those numbers don't even include identity theft
crimes prosecuted by other agencies.

``One of the ways identity thieves get information they use to impersonate
their victims is by Dumpster diving,'' said Beth Givens, director of the
Privacy Rights Clearinghouse, a nonprofit consumer information and advocacy
group in San Diego.

Customers, consumer groups and regulators are all demanding financial
institutions take more care in disposing documents. Acting Comptroller of
the Currency Julie Williams said, ``Attention to customer privacy concerns
is something that can involve some of the most sophisticated technology the
banks are using today, as well as some very mundane aspects of their
businesses.''

Andy Erler, president of Secure Shredding Services in Charlotte, N.C., said
sales are growing 20 percent to 30 percent a year as interest in shredding
grows. He declined to give specific figures.

``Maybe five or 10 years ago, if the president and CEO (of a bank) didn't
see a need, it didn't happen,'' Erler said. ``But now they're getting
pressure from outside.''

That pressure sends financial institutions to companies like Secured Data
of America Inc., based in Greenville, S.C. The company destroys about 55
million pounds of paper each year, and Bank of America and First Union are
its biggest clients, said Theda Vaughan, Secured Data president. Bank of
America would not discuss its document destruction program or confirm it's
a Secured Data client.

In Secured Data's Charlotte warehouse, employees run gloved hands through a
river of paper flowing down a conveyor, sorting colored sheets from the white.

To get this job, they've passed FBI background checks, have been
fingerprinted and are willing to work under the constant gaze of the more
than a half-dozen security cameras stationed around the building. Facility
Manager Forrest Irving III eyes their work from a closed-circuit monitor in
his office, then sends the tapes shot by the cameras to headquarters for
another review. The building is unmarked, as are the Secured Data trucks
that pick up the paper from clients.

The sorted paper slides into a shredder, a machine so powerful it can tear
a tire into shards. Another machine squeezes the confetti ribbons into
bales that weigh about 1,500 pounds. The bales rise in stacks on one side
of the room, waiting for trucks from a paper mill to haul them off, after
which they will be turned into tissue, diapers, cereal boxes and other
products. The company also shreds some clients' material on site, with the
client witnessing.

In Charlotte alone, Secured Data processes about 1.25 million pounds of
material a month, typically charging 10 cents a pound plus a $50 pickup
fee, Vaughan said.

``All my clients currently deem everything confidential,'' she said. ``At
the branch level you have all the teller tickets, tapes, copies of teller
receipts. . . . It is forms, credit card slips that have valid credit card
numbers on them. And returned checks, like (where) the address was
incorrect. That's a negotiable product, on a valid account with money in
it. Loan applications, like one that was rejected. ATM receipts ...''

Of course, banks have to save many records for a period. Some paper passes
through record-storage companies such as Iron Mountain before it is
destroyed. The records housed in Iron Mountain's Charlotte-area building,
many from area credit unions and insurance companies, are bar-coded and
given a destruct date, unless they're to be saved permanently, said Jeff
Walker, Iron Mountain general manager. When the date comes up, the paper is
shipped to a shredder.

At the First Union Customer Information Center in University Research Park,
the bank's single biggest paper-producing facility in Charlotte, four
Secured Data employees work full time to collect the 16,000 pounds of paper
thrown out each day, said Kathy Nebel, First Union corporate recycling
manager. Nebel's job is not only to reduce the amount of paper First Union
produces but also to safeguard that paper as it moves from teller counter
to paper mill.

``I always heard that with the advent of computers we'd have less paper,
but think of how much easier it is to print stuff now,'' Nebel said.

But even banks that have strict shredding programs don't always follow them.

A random check of eight bank branches in Charlotte revealed that three had
unlocked trash containers behind their buildings. Two of those contained
trash bags with sensitive customer information inside. Both were at banks
that claim to destroy all such paper.

Information on papers printed with customer names included: customer birth
dates, home telephone numbers and addresses, account numbers, account
balances, taxpayer ID numbers and deposit amounts. It takes less than that
to do real damage to someone, experts said.

``All you need is a Social Security number and a mother's maiden name and
you can become anybody you want,'' said Erler of Secure Shredding, whose
clients include thrifts and community banks. ``If you ever got your hands
on some copy of somebody's loan application, you can find out everything
you want to know about somebody.''

Even the best document-destruction program can be undone by a careless worker.

Erler recalled that while talking with a building manager of one uptown
building, he watched an employee of a bank in that building walk onto the
loading dock carrying a bin brimming with customer account receipts. ``She
dumps them into the Dumpster and most of them make it in but some hit the
concrete floor,'' Erler said. ``The building manager told her `Do you know
we have a shredding and recycling program?' and she said `I know, but the
bins are full.'''

 ©1998 PioneerPlanet / St. Paul (Minnesota) Pioneer Press