Do you shred? If not, it's likely you will this summer. That's because there's a law with a provision going into effect June 1, 2005 that says businesses that employ even one person from whom they have collected personal information have to “destroy” that information before throwing it away.

The Fair and Accurate Credit Transactions Act, also known as FACTA, was passed in December of 2003, and it is just one of many recent pieces of legislation aimed at protecting consumer and company privacy, including medical records, credit information and corporate trade secrets.  Rules were just recently written on the disposal provision, which requires the destruction- “shredding or burning” or “smashing or wiping” - of all paper or computer disks containing personal information “derived from a consumer report” before it is discarded.

The law is designed to combat what the National Crime Prevention Council calls the fastest-growing crime in the United States: identity theft.   Employers who fail to abide by the statute could feel it in the checkbook, too, if the information they didn't shred winds up getting out.  According to the National Association for Information Destruction (NAID), the penalties for violating the law include:  Civil Liability. An employee could be entitled to recover actual damages sustained if his or her identity is stolen as a result of an employer's inaction.  Or business owners could be forced to pay statutory damages of up to $1,000 per employee. Class-Action Lawsuits. If large numbers of employees are affected, they may be able to bring class-action suits and get punitive damages from employers.  Federal Fines. The federal government could fine offenders up to $2,500 for each violation.  State Fines.  States can fine up to $1,000 for each violation.