Paper and data security for professionals who handle sensitive client information

If you are in a profession in which you collect paperwork on your clients – for example, an accountant, attorney, financial advisor, or psychotherapist -- you may have paperwork in your home that could cause a lot of trouble if it fell into the wrong hands. 

At this point, we all know someone who has been a victim of identity theft. One friend of mine found that his tax refund had been directed to someone else’s account. It took him several years to collect the funds. Another friend’s email account was broken into. Posing as her, the hacker sent an email to her financial advisor and directed that a large sum of money be transferred to a new account.

It is hard to believe now, but our social security numbers used to appear on all kinds of paperwork. We have come across countless boxes of old pay stubs collected by our clients, with their social security number displayed right at the top of each stub. Some bank statements and medical records used to include them too.

I wish the IRS would find a way to encrypt our social security numbers on their documents, but they still appear on W-2s and on forms that need to be signed and submitted each year to process taxes.

The only solution is to stay on top of papers as we collect them, and not let the stacks of paper ever get so large that we lose control over them. 

Debby and Stan’s son, Mark, hired us to clear out a lot of the stuff that had accumulated in their Brooklyn home because he planned to renovate it for them. He intended to convert part of the ground floor into a large bedroom with a bathroom so they could eventually live entirely on this floor and not have to worry about stairs. This would allow Debby and Stan to age in place and avoid having to move in the future.

It was a great idea and we were happy to work with them. They were attached to their things, but they were not hoarders. Just heavy collectors. The main problem was that they ran their joint accounting practice out of the house and the business files had taken over a lot of space.

Stan was using what was once a beautiful formal dining room as his office, and Debby was using an enclosed porch that must have once been a lovely place to have breakfast, as hers. Both workspaces were packed with files, but the files in these workspaces were no match for the files in the basement. There, they had stored more than forty years of files from former and present clients. 

As we toured the basement the first time, I could see, without opening a single box or file, the names and social security numbers for many of their clients. They were scattered all over the place, in random piles.

I quickly realized how easy it would be for anyone entering the house to collect -- without much trouble at all-- enough private information on these clients to get away with some lucrative identity theft. 

As we worked with them, both Debby and Stan could see the need to shred all past client files and to secure the current files. We wound up bringing our on-site shredder to the house four or five times. This company has a shredder on their truck and you can watch your papers get pulverized right there on the street. It’s an activity I find oddly comforting. 

If you are in the position of keeping financial or tax records for your clients, you have a responsibility to protect this information. You are a steward of your client’s paperwork and, as such, you should stay on top of technology and find ways to handle their data and information with discretion and security.

The solution might be that you should not be keeping paper files on anyone. Or you keep just what you need and store them in locked cabinets. In this case, you should prepare a calendar of how long you will hold onto each client’s information, and you should have a clear policy for destroying your copies of their files after a stated period of time.

At the very least, you do not want to leave boxes of this sensitive information in your home to be dealt with haphazardly after you die. You should have a clear plan for them which has been expressly stated to your heirs. This will prevent them from suddenly finding themselves the caretaker of strangers’ sensitive information.

If you are keeping digital files with client information, you have the same responsibility – to protect the data you have. Please don’t think that because something is on your laptop it is safe from prying eyes. There are apps, services, and backup drives that you can use to manage data securely. And password managers are a hugely important tool. This article from the Wirecutter gives a great overview of some of the options available: Back up and secure your digital life.

It's a chore to keep on top of this data. But setting clear guidelines makes it a lot easier than finding yourself having to deal with it all at once. Or, worse, cleaning up a data breach.

Paper and data security paper shredder image sensitive data

What to do with collections?

We are often asked to handle large collections of things. We have seen all kinds of collections – whimsical, spiritual, very expensive collections, and very modest ones. We have handled herds of decorative elephants, delicate teapots, campaign buttons, Coke bottles, freebies given away by airlines, you name it. 

We all know how this happens. You express your love for something to a few friends or relatives and, suddenly, you find that you are the recipient of those cute little collectibles for the rest of your life. Every birthday and gift-giving occasion is another chance for them to present you with yet another item in your ever-growing collection.

These collections can be fun for the collector, but they can, sadly, cause some issues for family and heirs. The vast number of items in each collection can be difficult and expensive to manage. Where once the collector looked around and admired each item in the collection as a unique entity with a story about how it was acquired, now the heir just sees a large amount of things that need to be handled, and the collection has an emotional hold on everyone because it represented the deceased so strongly.

We have worked with a number of clients who believe that because they have worked so long to create their collection, the collection must have some re-sale value. They seem to believe that the sheer number of items should make the whole lot more valuable. Sadly, this is rarely the case. Once in a while a tchotchke has re-sale value, if it was created by someone whose work is in demand, but in general these kinds of collections have very little re-sale value.

Years ago, we managed the estate of Lorraine, a woman who had amassed a tremendous collection of owls. Lorraine had ceramic owls, glass owls, paper owls, and stone owls. She had mugs, pillowcases, and t-shirts covered in owls. She had paintings of owls, stuffed owls, and owls stitched by needlepoint. 

Her executor was her niece, Janet, who lived in Florida. Janet was really stressed out about all these owls. She had no room for this huge collection and she knew they had no re-sale value. But she had loved Lorraine dearly and the owls had been really important to Lorraine.

Janet agonized over this. The collection almost seemed to hold a power over her. We identified a reputable charitable organization that would take them all as a donation, and we even found someone willing to try to sell them on Etsy for Janet, but neither idea felt right to her.

Finally, we came up with a solution. We decided that everyone in Lorraine’s life should have one owl. So Janet gave one to every member of the family and one to every friend and neighbor Lorraine had liked. She gave one to the super in Lorraine’s apartment building, another to her hair stylist, and even one to her dentist.

It took a lot of time and effort on Janet’s part, but it was worth it in the end. Each owl gift was another chance for Janet to share a memory of Lorraine with someone else who had loved her. None of these people would have wanted the whole parliament, but everyone was touched to receive one owl to remember Lorraine by.

If you have a large collection of things yourself, please keep in mind how your heirs will manage the collection. You may want to make a list of the items in the collection – or at least the key items – and designate them as gifts to be given to friends or family after you die.

Or you may want to consider giving them away to people now. You can offer that everyone who comes over can look over the collection and pick their favorite piece to take home with them. This is truly, always, the best way to give things away – one at a time, with each piece going to someone who appreciates it. And one of the great advantages to doing this while you are alive is that you can go visit your collections wherever they have wound up. Imagine sitting down to Thanksgiving dinner at your cousin’s place and being served with your own owl napkin – which you gave to them to cherish on your behalf!