Not a shred of doubt | Lisbon's File-Busters keeps sensitive documents away from prying eyes
An industrial shredder towers over Heather Rideout as she stretches over a conveyor belt feeding reams of sensitive documents through its teeth. Her petite hands, clad in flowered gloves, shake medical records out of a yellow envelope. Names, addresses and personal health histories pass through the blades and are transformed into a confetti of innocuous shreds. Rideout yells out over the drone of the machine as the strips rain down from the hopper into a baler, “Usually we have two people. We can put out 1,600 pounds an hour.”
“We” is File-Busters, the document disposal and records management company Rideout started in 2006 in an old furniture warehouse in Lisbon. Medical providers, financial institutions, employers and anyone else with sensitive documents to destroy comes to File-Busters to make sure their private data doesn’t end up in the wrong hands. The company’s clients range from banks with routine shredding schedules to senior citizens who walk in the front door with a cardboard box, Rideout said. Tougher regulations governing consumer information, coupled with greater public awareness of identity theft, have upped the demand for professional document destruction services.
“The perception is that ‘confidential’ means there’s got to be a Social Security number on it,” Rideout said. “The fact is, if a piece of paper has a name and address on it, it needs to be treated as confidential.”
Rideout and her husband, a surgeon, needed such a service themselves three years ago. He closed his practice for a yearlong family trip to New Zealand, but couldn’t find a company that met his medical record storage needs. When the family returned, Rideout’s wheels started turning. She’d been looking to start her own company, and she knew the demand for document destruction was there. “Maine was just starting to click in that they had to deal with their information in a better manner,” Rideout said.
Outsourcing the office shredder
Businesses can be fined thousands of dollars for failing to comply with ever-stricter information protection laws, or put their own sensitive data at risk. Courts consistently have failed to recognize trade secret protections if companies don’t take every precaution to guard the information themselves.
“They can lose copyrights, they can lose patents, they can lose proprietary information,” said Tom Simpson, president of the board of directors at the National Association for Information Destruction.
Adding to the burden are requirements that companies document the destruction itself, with disposal schedules and certifications of destruction. A sampling of the questions an auditor will ask: How narrow, in inches, were your documents shredded? Who shredded them? How long and in what kind of container were they stored prior to shredding? Where were the documents disposed of after shredding?
The liability and inconvenience has prompted many businesses to outsource to companies like File-Busters, Simpson said. NAID has more than 900 members, up from about 600 two years ago, he said. The industry, which also includes electronic record storage and destruction, has grown 20% over the last year, Simpson said. “A lot of what we do is being driven by federal legislation and regulation,“ he said. “A lot of the growth is entrepreneurial.”
File-Busters competes against one other local shredder in Lewiston, while seven other records management and disposal companies have popped up around the state. Rideout prefers not to share her pricing structure with the competition, but her fees are based on volume. With a client base of 240 this year, 80 of them routine, Rideout has enjoyed conservative growth. Her annual revenue totaled $120,000 in 2008, up from $50,000 her first year. She employs one full-time worker, other than herself, and a couple of part-timers as needed, she said. All have undergone background checks.
Rideout punches in a security code as she enters the File-Busters warehouse, an arched metal structure located behind her home that the business has begun to outgrow. Walking past rows of shelved file boxes marked “general ledgers” and “engineering archives,” she describes her business’ services. File-Busters can secure along every step a company’s documents, from the office trash bin to eventual recycling at a local pulp mill. File-Busters sells secure storage bins that can be picked up in a locked truck that later backs directly into the Lisbon warehouse for storage or shredding. The documents are weighed and shredded, paper clips and all, to 5/16th of an inch within three days. The machine cranks out about one 12,000-pound bale of shred a day, all of which is sent to the mill for recycling. Socially conscious practices have been important to Rideout since day one. She donates 2% of her profits and 2% of her and her employees’ time to charity. Last year, the business planted a tree for every customer.
Every step of the disposal process is documented, and a certificate of destruction is issued upon completion. For stored records, File-Busters keeps track of disposal schedules and notifies clients when papers are due for shredding. Customers can view their files in a secure room on site, and witness the entire storage and destruction process if they choose, Rideout said. She also trains businesses on proper document disposal procedures.
Identity crisis control
Startups like File-Busters have sprung up as identity theft increasingly appears on consumers’ and businesses’ radar. The Federal Trade Commission estimates that 10 million Americans have been victims of identity theft, and each individual spends up to $1,500 and an average 175 hours to undo the damage, said Jane Carpenter, an assistant complaint examiner in the Maine Attorney General’s consumer protection division. The annual cost to businesses, who foot the bill for fraudulent credit, is $56.6 billion, the FTC estimates. If ranked by that figure as an industry, identity theft is larger than the entire U.S. consumer electronic store market, Carpenter said.
The state doesn’t track the number of identity theft cases in Maine, but the crime ranked third, behind property crimes and stalking, in a 2007 victimization study by the University of Southern Maine’s Muskie School of Public Service. More than 10 percent of the 803 adults surveyed reported being the victim of identity theft during the previous year. Fewer than 30% reported it to local law enforcement, the study found.
Identity thieves have evolved right along with technology, said Simpson of NAID. Instead of pawing through bags of intact documents, thieves strike right for the goldmine. “They’ve gotten more sophisticated,” he said. “Now they look for those little bags of shred in the garbage.” The criminals then piece the documents back together by hand or use document reconstruction software, he said.
It’s enough to make any business owner nervous. But outsourcing records management to companies like File-Busters can also save money. It frees up employees’ time and the money and effort required for in-house shredding. “People are finding we’re cheaper than replacing their shredders,” Rideout said.
Rideout plans to make File-Busters the first NAID-certified company in Maine upon moving into a larger facility and meeting the final requirement, installing a 90-day security camera. The word-of-mouth advertising and networking that built her client base continue, and electronic records management is in her sights for the future. Three years after she started the company to meet her family’s document disposal needs, Rideout is a customer herself. “We were always conscious about how we handled our documents,” she said. “It’s just more convenient now.”
Jackie Farwell, Mainebiz staff reporter, can be reached at jfarwell@mainebiz.biz.
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