By Bob Howard
BBC Radio 4's Money Box
Shredding sensitive documents reduces the risk of identity theft
Banks should shred all their paper waste to protect customers' personal details, the chair of the parliamentary watchdog on ID fraud has urged.
His call comes as the Information Commissioner investigates how three banks and a post office left customers' personal details in bins outside branches in the Southampton area.
The waste included bank statements and cut up credit cards.
The companies being investigated are HSBC, Halifax, Royal Bank of Scotland and the Post Office.
Nigel Evans, chair of the All Party Parliamentary Group on Identity Fraud, thinks banks need to re-examine how they destroy waste.
Speaking to BBC Radio 4's Money Box he said: "It's about time banks looked afresh at the way they dispose of information whether they think it's high level confidential or just run of the mill. If they shredded everything there wouldn't be this problem."
The post office and the banks in question were reluctant to disclose exactly how they destroy paperwork.
But in a statement, HSBC did explain to the programme how its process should work: "All confidential waste is separated from general waste and disposed of in secure bins which are collected from inside the branch by a secure disposal service.
"These secure bins are stored overnight in a locked room, and at no point are they left in an area accessible by the public. The confidential waste is shredded by the secure disposal company."
It is not clear exactly what happened at the branches in Southampton but all three banks say they separate confidential and non confidential material.
David Smith, the deputy Information Commissioner, says it is up to the banks how best to respond to the demands of the Data Protection Act.
"The legal requirement in the Data Protection Act is that they have adequate security, not that they shred everything. You don't need to shred every piece of paper but you do need to shred sensitive information," he said.
All firms must conform to the act and keep personal information secure, even as they are getting rid of it.
Most big companies in Britain have set procedures on how to dispose of sensitive material.
However, not all staff are aware of their obligations.
Todd Johnson is a consultant at the risk management company Diligence, which has advised UK banks and financial institutions on this issue.
Speaking to the programme, he said: "Most companies will have some sort of statutory requirement that employees properly dispose of hard copy waste but often that's not passed down."
The investigation in Southampton continues and as yet it is not clear what action, if any, the Information Commissioner will take.
It has the power to start criminal prosecutions if it feels companies are not following its recommendations.
BBC Radio 4's Money Box was broadcast on Saturday 14 October at 1204 BST and will be repeated on Sunday 15 October 2006 at 2102 BST.