SecurShred Finds Market Growing Amid ID Theft Fears

April 19 , 2004 in SecurShred in the News

Eric Flegenheimer and Ken Miller launched SecurShred in South Burlington in October 2000, and they say they couldn’t have chosen a more opportune time.

However, prospective clients were at first bewildered by the notion of an on-site, document shredding service.

“There were customers who we called and they would say, ‘You’re a what?’ and then they would say, ‘No thanks, we’re all set,’ ” Flegenheimer said.

As reports of identity theft spread, however, SecurShred’s owners have noticed a marked difference. The same customers who shrugged off the company a few years ago “now say, ‘I think I’d better call those guys and find out what they’re all about,’ ” Flegenheimer said.

“We’ve slowly started educating people in Vermont about the importance of shredding. Our timing was extremely good,” Flegenheimer said.

Dubious at start

Flegenheimer was looking for another business to launch after selling his seafood supply business a few years ago, and his father suggested that he start a paper shredding company.

Flegenheimer was dubious. So was his friend Miller.

“At first, I told him he was crazy,” Miller said.

Still, Flegenheimer began researching the industry and, together with Miller they decided that the idea did make sense.

Identity theft is a growing problem in America, as an FTC survey released in September suggested when it said 9.9 million Americans had experienced identity theft in the past year.

As many as 516,740 cases were reported to the FTC’s consumer complaint database, the Consumer Sentinel, in 2003 – up from 404,336 in 2002 and 220,343 in 2001.

In Vermont, 159 cases of identity theft were reported to the database in 2003.

New federal regulations have also boosted SecurShred’s business. Laws including the Health Insurance Portability and Accountability Act (HIPAA) of 1996 and the Gramm-Leach-Billey Act of 1999 now require health care organizations, health insurance providers, and financial institutions to take greater measures to protect patients’ and consumers’ privacy.

“Those two laws alone have helped not only our business but society in general realize the importance of (protection against) identity theft,” Miller said.

The state of Vermont is also taking definitive action against identity theft.

In 2003, Sen. John Campbell, D-Windsor, introduced a bill that would prevent businesses from discarding “personally identifiable data,” about customers and employees, including data about medical conditions, bank accounts, identification numbers or credit information unless that data were shredded, erased, or modified beyond recognition.

“We think that is it extremely important to address this on a state level,” Campbell said. “If we can prevent (identity theft) or try to save one person from having to go through it, it’s going to be completely worth it.”

Carving a niche

Flegenheimer and Miller say they have hundreds of customers throughout the state, as well as clients in Massachusetts and New Hampshire – ranging from individuals who need a few boxes of personal documents shredded to large companies who go through an annual document purge.

The company travels to clients’ sites in one of its two mobile shredders, which weigh the documents (SecurShred charges by the pound), shred them at a rate of about 3,000 pounds an hour, and transport them back to SecurShred’s building in South Burlington, where they are bundled and recycled.

“We’ve grown steadily and carved out a niche. We’re the only (local) company that shreds on-site,” Flegenheimer said of SecurShred, which now has six people on staff: two part-time employees, two full-time employees and Flegenheimer and Miller.

As much as identity theft awareness has spread and business has grown for SecurShred, Flegenheimer and Miller express frustration that some companies are nevertheless neglecting to dispose of their documents properly.

“So many people think, when they recycle paper, that it’s just being destroyed. But someone could walk by a recycling bin in a building and just pick something up. Every day, we see paper that should be shredded and is not,” Miller said, adding that when SecurShred is in a building shredding one company’s documents, another company’s recycling bin is often out in the open filled with private information.