ShredStation Guards Against ID Theft

October 6, 2006
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GRAND RAPIDS — Duthler’s Family Foods has added a new convenience for its customers — an on-site shredding service for the kind of sensitive documents that people don’t want falling into the wrong hands for fear of identity theft.

The grocery chain currently has a ShredStation deposit box at its stores at

1133 Michigan St. NE
and
830 28th St. SW.

“Identity theft is a problem that is not going away,” said chain owner David Duthler. “The ShredStation boxes offer our customers a safe, secure and convenient way to protect themselves against this terrible and life-changing crime.”

ShredStation drop boxes can be found in Pennsylvania, Wisconsin and Utah, but this is the company’s first entry into the Michigan market.

The drop boxes are made of reinforced steel, are slightly over four feet tall and are equipped with a credit card reader. Each deposit costs $5. Customers seal their documents in a ShredStation envelope that can hold up to two pounds of material, swipe their credit or debit card through the reader and deposit the envelope. The transaction receipt has a code number that automatically registers on the ShredStation Web site.

One ShredStation can handle up to about 150 pounds of material, said ShredStation President Al Villamil. Generally, when the deposit box is at 75 percent of capacity, it automatically sends a signal to a local document destruction company called Shred-it, and a Shred-it truck comes to the site and destroys all contents of the box on the spot. Villamil said that since the ShredStation product is just being introduced to this market, the boxes are automatically rigged to send a notice to the service provider every 10 days rather than wait until it is at 75 percent capacity. Customers are notified via text message or e-mail of the exact day and time their documents were shredded. If they want, they can download a “certificate of destruction” for the ShredStation Web site as verification.

From there, the box’s contents are pulped and recycled. Shred-it brings the shredded contents back to its facility and makes bales out of it, Villamil explained. The bales from the Grand Rapids area are then trucked to Wisconsin and used to make tissue.

Villamil calls the drop boxes “a new tool in the fight against ID theft.” He said more than 500 of the deposit boxes are going to be placed in 10 markets across the country and that the company plans to expand to more than 150 markets by the end of this year. Villamil owns a $50-million-plus waste paper trading and recycling company called Viking Fibers Inc., and it was through that business that he came up with the idea of ShredStation, a business he started last year.

“We did a lot of work helping the document destruction folks set up facilities and manage the paper once it was shredded,” Villamil explained. “We then took that shredded paper and placed it with domestic and foreign paper mills around the world so it became paper again. But in the process — and being entrepreneurs — we certainly noticed that there was a very serious gap in that industry. Here was an entire industry that had no service option whatsoever to serve individuals with small quantities of documents like you and me.”

First off, Villamil said, his company created a self-pay, technologically “smart” box — smart in the sense that it could contact the service provider directly for content shredding. ShredStation is controlled by custom-written software and the box itself is patent pended.

“We have also patented the method of doing business for the self-pay secure depository box,” he noted. The “method” is the way in which customers interact with the depository box, he explained.

Last year, the Federal Trade Commission’s complaint database received more than 685,000 complaints, of which 63 percent were fraud complaints and 37 percent were identity theft complaints. The most common form of identity theft was credit card fraud (26 percent), followed by phone or utilities fraud (18 percent), bank fraud (17 percent) and employment fraud (12 percent). Electronic fund transfer-related identity theft was the most frequently reported type of identity theft bank fraud during 2005.

According to the FTC, Michigan had the 15th highest per capita rate of identity theft complaints in the nation in 2005. There were 7,139 complaints registered in all. The top cities for identity theft were Detroit, with 1,122 complaints last year; Grand Rapids, with 204 complaints; Lansing, with 139 complaints; Ann Arbor, with 137 complaints; and Flint, with 115 complaints.

It doesn’t cost a retailer anything to have a ShredStation placed on site, Villamil said, but it is an added service that can increase foot traffic on their site. He said the retailer gets a small percentage of the $5 fee to cover space and utility use.

Villamil’s company is talking to a handful of banks in the areas about placing ShredStations at their sites.

“Actually, the banks are more aggressively contacting us,” he noted. “It’s a big one for banks. There is a good fit with banks because people trust banks already and they are secure places.”

The average home shredder shreds about six pages a minute, so it would take 26 minutes to put through the home shredder what you could just dump at the ShredStation, Villamil pointed out. He acknowledged that some people initially register a little sticker shock at the $5 disposal fee.

“The company is providing a service,” he said. “I want to dispose of my documents in a secure way, handled by professionals. If you look at breaches in the industry, they’re not coming from the professional document destruction industry. Most security breaches occur internally.”

Villamil’s company also is developing an Electronic Media ShredStation that will shred and destroy PDAs and cell phones so no information can be gleaned from them. The product will launch next year at electronic-oriented retail store locations, he said. The company is in the process of creating a large shred station, as well; the station could handle the contents of a box full of documents weighing 20 to 40 pounds, like the boxes of documents a lot of people have piled up in their basements. They may include papers such as credit card statements, contracts, tax records, bank account data, medical records, receipts or invoices, cancelled checks, and debit card numbers that really should be disposed of, Villamil said.    

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