Data Destruction Policy: Why Every Business Needs One

A data destruction policy is one of the most overlooked tools a business has for protecting customer information. The Association of Certified Fraud Examiners (ACFE) recently posted an article titled, “The Importance of Having an Effective Data Destruction Policy,” written by Milica Vojnic.

Businesses collect an abundance of customer information, some of which is sensitive and personally identifiable. Vojnic reminds us that while collecting customer data allows businesses to operate more efficiently, doing so comes with the risk of leaking personal information to malicious third parties.

Because of this risk, businesses are responsible for handling and destroying customer data in a safe and secure manner, and a written data destruction policy is how they do it consistently.

Data Protection Laws and Your Data Destruction Policy

The article notes that governments worldwide are creating tighter rules and regulations in response to the threat of data leaks.

For example, the General Data Protection Regulation (GDPR) was adopted by the European Union to protect the personal data of individuals in the EU. Under the GDPR’s storage limitation principle, personal data should be kept no longer than necessary for the purposes for which it is processed. Many data protection laws, including the GDPR, indicate that businesses are responsible for protecting customer data both during and after its use.

Failure to properly handle customer data, including the destruction of data that is no longer in use, can provide fraudsters with an opportunity to steal personal information. This, of course, is detrimental to both customers and businesses.

Choosing the Right Methods for Your Data Destruction Policy

With this said, how should businesses destroy customer data? Choosing the right destruction method depends on the sensitivity and confidentiality of the data in question. The article lays out a variety of destruction methods and security considerations that belong in every data destruction policy.

Method 1: Physical Data Destruction

Physical data destruction involves destroying the physical medium used for data storage. Once the storage medium is properly destroyed, the data is effectively unrecoverable.

While this is the most secure form of data destruction, it is also very expensive since the storage medium is rendered useless. Given the benefits and drawbacks of physical data destruction, this method is recommended for highly sensitive and confidential data.

Method 2: Secure Data Deletion

A second method, secure data deletion, is considered suitable for the destruction of most types of data. Instead of destroying the physical storage medium, data destruction experts overwrite existing data with binary code, such as patterns of 1s and 0s, so the original information can no longer be read.

One benefit of secure data deletion is that the storage medium can be reused. While this method is not as secure as physical data destruction, it is still considered effective in most cases.

Additional Security Considerations for Your Data Destruction Policy

In addition to choosing the proper destruction method for specific types of customer data, businesses must also be aware of additional security considerations. For example, businesses must ensure that all backup copies are destroyed alongside the original.

All data should be traceable throughout its lifecycle. To ensure that all data is accounted for, businesses should be aware of the location of all storage media.

Finally, businesses must select reputable data destruction specialists. Choose specialists who can provide post-destruction certificates indicating that data was destroyed using international best practices.

Conclusion: A Data Destruction Policy Protects Customers and Your Business

To conclude, implementing a sound data destruction policy will protect your customers’ rights while also ensuring compliance with data protection laws.

Want to learn other ways to prevent fraud?  See our article on minimizing the risk of fraud in a turbulent economy.

Give Employees a Safe Way to Report Data Mishandling

A data destruction policy is only as strong as the people who follow it. When employees see customer data being mishandled, stored where it shouldn’t be, or discarded carelessly, they need a safe way to speak up.

Red Flag Reporting’s ethics hotline gives employees a confidential, anonymous way to report these and other concerns. Contact us today to learn how we can help your organization protect its customers and its reputation.

Data Destruction Policy FAQs

What is a data destruction policy?

A data destruction policy is a written set of rules that explains how, when, and by whom an organization’s data, including customer data, is securely destroyed once it is no longer needed. It typically addresses approved destruction methods, backup copies, tracking of storage media, and the use of outside specialists.

Why does my business need a data destruction policy?

Data that is no longer in use can still be stolen. Data protection laws such as the GDPR make businesses responsible for protecting customer data both during and after its use, so a data destruction policy helps reduce fraud risk and supports compliance.

What is the difference between physical data destruction and secure data deletion?

Physical data destruction destroys the storage medium itself, so the data cannot be recovered and the medium cannot be reused. Secure data deletion overwrites the existing data so the medium can be reused. Physical destruction is the more secure option for highly sensitive data, while secure deletion is effective for most types of data.

Should a data destruction policy cover backup copies?

Yes. Backup copies should be destroyed along with the original, or a forgotten backup can expose the same information. Knowing the location of all storage media helps ensure nothing is missed.

How do I choose a data destruction specialist?

Choose a reputable specialist that can provide post-destruction certificates showing the data was destroyed using international best practices. Those certificates also give your organization documentation to support its data destruction policy and compliance efforts.