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updated 3/14/2011 2:14:10 PM ET 2011-03-14T18:14:10

Shredding paper documents is one of the most cost-effective ways to prevent fraud and identity theft. With the increased availability of inexpensive home shredders, it has become easier to destroy papers with personal information on them.

However, the problem is that most people aren’t shredding enough.

Junk mail, for example, seems innocuous enough to toss in the recycle bin. But what if the junk mail comes from a credit-card company or a bank offering you a loan?

It’s best to shred it, said Bryce Littlejohn, vice president of sales in the western United States for Oakville, Ontario-based Shred-it.

“Credit card or loan offers may sometimes be pre-completed by the lender and may therefore contain sensitive information regarding your account details,” Littlejohn explained. “It is particularly important to securely shred these documents as soon as they are no longer required.”

Other documents that Littlejohn suggested should be put through the shredder blades include credit card receipts and expired credit cards, medical and financial records, canceled checks, computer printouts, tax records and correspondence related to any of those items.

The point of shredding

Why shred at all? The truth is that even in this age of the Internet and cybercrime, most of identity theft and fraud relies on an old-fashioned paper trail.

Thieves steal mail or dig through recycling bins and trash to get as much personal information as possible. Tossing intact anything that contains your name, address, phone number, birth date or financial-record numbers puts you at risk of identity theft.

Of course, before you shred anything, make sure you won’t need that document again. Each state has regulations on how long certain documents should be kept, particularly if those documents are used for business or needed for taxes.

Non-tax documents, including utility statements, credit card statements and medical bills should be kept for one to three years. Tax documents should be kept up to six years.

Littlejohn pointed out that some documents should never be destroyed, including legal documents, retirement information and personal records such as birth and marriage certificates.

How to shred properly

The best approach to shredding documents is crosscutting, which chops the paper down into confetti-size pieces. Consumers should consider a crosscutting shredder for home use rather than a strip shredder, because paper that is strip-shredded can still be pieced together.

“Consumers are advised against manually ripping or cutting paper into pieces as those pieces could be reconstructed by an individual interested in performing fraudulent acts,” Littlejohn said.

To dispose of the shredded documents, it is best to take the paper to a recycling station.

“Curb-to-hopper totes have wheels and can be easily either rolled off the premises and/or moved and misplaced by vendors such as cleaning services, etc., as they resemble trash cans — which could potentially result in security breaches,” Littlejohn said.

Another option is to have the shredding done by a professional document-destruction-services company. In addition, a growing number of communities have document-shredding days where residents and businesses can have documents destroyed and disposed of safely for little to no cost.

 

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