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Identity Theft
Fear of identity theft is at an all-time high. The term "Dumpster
diving" has gained a place in the lexicon. And the Secret Service
is recommending that you not only buy a shredder, but that you use
it frequently.
Just a few years ago, the shredder was seen as an unwieldy industrial
product used mainly by government agencies and secretive corporations
afraid that competitors might be rummaging through their trash.
Then came a spate of high-profile data breaches affecting companies
from Ameritrade Holding Corp. to Time Warner Inc.
Now, lightweight shredders aimed at home users and small businesses
occupy prominent shelf space at stores such as Office Depot and
BrandsMart USA. After growing about 25 percent over the past three
years, shredder sales in the United States are expected to rise
14 percent in 2006, according to the School, Home & Office Products
Association.
Also boosting sales is the so-called shredder law, a provision
of the Fair and Accurate Credit Transactions Act that took effect
in June requiring all employers, even small businesses, to destroy
documents containing a worker's personal information before throwing
them away.
"This is a new growth business directly related to our society,"
says Matthew Marlotte, CEO of World Office Products, a Weston company
that sells shredders and security cameras through retailers including
Wal-Mart, BrandsMart and OfficeDepot.com. "We can all hope
that one day they won't be necessary, but I don't think our country
all of a sudden is going to get safer."
The Secret Service agrees that the threat is real. When asked what
people should do to prevent ID theft, John Large, deputy special
agent in charge at the Secret Service office in Miami, replies:
"Get a shredder. And use it. Too many people use it as a door-stop."
Diane Clifton of Parkland doesn't need to be convinced. In August,
she realized that an ID thief had withdrawn $5,000 and ordered new
checks from her Bank of America account.
Clifton didn't lose the money because a stop payment was put on
the $5,000 in time and the checks were intercepted by a U.S. postal
inspector. But she was sufficiently spooked that she bought a shredder
that she uses "all the time."
"I got it after the identity theft, the way you don't get
a [burglar] alarm until your house gets broken into," she says.
More than 130 security breaches at credit-card companies, retail
stores, data brokers and other organizations compromised the personal
data of a record 57 million people in 2005, though it is unknown
how many of those people have become ID theft victims.
Those numbers benefit companies like World Office Products.
In a quiet Weston office park, CEO Marlotte and Brian Daniels,
the company's president and chief operating officer, explain the
dynamics of the shredder business.
Cross-cut machines, which slice papers both vertically and horizontally,
account for three-quarters of all sales in the industry, they say.
A couple of years ago, the market was split between cross-cut and
strip-cut shredders, which slice only vertically.
But fear of Dumpster diving, when identity thieves sift through
garbage cans or dumpsters looking for bills and credit card statements,
has spurred sales of higher-quality machines. Some cut papers into
tiny diamonds, making it even harder for would-be thieves to put
together the pieces.
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