Identity theft has become a national problem of enormous proportions. According to the Federal Trade Commission (FTC), nearly 10 million people fall victims to identity theft annually, costing customers $5 billion in out-of pocket losses and businesses $48 Billion .
This rise in identity theft is presenting employers with major headaches because they are now liable for identity theft/breaches that occur in their workplace. As of January 2005 to March 2008, there has been reported to the FTC over 223 million data records of U.S. residents have been exposed due to security breaches. This information, can be viewed at PrivacyRights.org. So, all businesses, corporations, schools, financial institutions and hospitals should be concerned about Identity Theft, Identity Theft Red Flags Rule, FACTA, HIPAA, and GLB Safeguard Rules in how they will impact their organizations. If not, the organization may NOT be in compliance with the new Federal and State Laws and modified regulations.
The liability, both civil and criminal for businesses for non-compliance can result in fines up to $1,000,000 per occurrence, 10 years imprisonment for executives, removal of management and employees, and class action lawsuits with NO statutory limitation to name just a few.
There are Five Common Types of Identity Theft: Drivers License identity theft, Social Security identity theft, Medical identity theft, Character/Criminal identity theft, and Financial/Credit identity theft. But, most employers and individuals think it is just about Credit Cards fraud or theft. Criminals are stealing Non-Public Information (NPI) in all 5 areas! Just imagine your medical information file has been stolen, leading to medical bills from hospitals you NEVER visited and receive treatment. Or your social security number was stolen, resulting in the IRS department seeking payment of taxes due from businesses you NEVER owned. Or your driver license number has been stolen, resulting in the Police Department arresting you for tickets that you NEVER knew about. Or new credit accounts (mortgages, credit cards, and loans) were opened in your name, but you NEVER applied for them and now you are liable for all debts after 60 days by federal law! These are just a few of real live identity theft cases occurring throughout America. All due to identity theft and breaches! What do you think September 11, the attack on our Twin Towers in New York…identity theft.
Today, business needs to rapidly education themselves (and consumers alike) on this national problem and be open-minded to possible solutions that can implement into their organizations to become more compliant. Based on CIO Magazine, “The Coming Pandemic”, Michael Freidenberg, May 15th, 2006 reports, “When it comes to cleaning up this mess, companies on average spend 1,600 work hours per incident at a cost of $40,000 to $92,000 per victim.”
So, it is highly recommended by Atty. Kirk J. Nahra, partner with Wiley Rein & Fielding L.L.P. in Washington, D.C., leading expert in privacy and information security litigation and counseling for companies facing compliance obligations in this country, states in his “White Paper” report, that companies needs to implement a security system that is continually monitored, as well as, have a service that will handle RESTORATION and MITIGATION for it’s employees and customers. Having a service that provides FULL restoration and mitigation would help reduce liabilities and class action lawsuits against their organization.
Mike McCoy, Director of the Identity Theft Institute, international expert and co-author of “Who is You? The Coming Epidemic of Identity Theft” and the author of “The Silent Crime, What You Need to Know About Identity Theft”, states “identity theft is on the rise and the worst has not come yet.” So the best two recommendations, an institution can do to limit identity theft exposure and losses are to train employees on identity theft and to offer the best Identity Theft Protection & Restoration service to employees and/or customers. The service that he endorses, as the best voluntary benefit service for employees and/or your customers, can be viewed at CombatProtection.com.
The time is now, for all institutions in America to put a “sense of urgency” into instituting a “Culture of Security”, as stated by The Federal Trade Commission, within their establishments to help reduce and prevent identity theft in the workplace. While identity theft & breaches will never be stopped, but it can be reduced, as well as liability exposures! By implementing the proper security systems, employee training, documentation, and continual monitoring of the effectiveness of your Identity Theft Prevention Program, is a pro-active position in addressing this major crisis. Small to Mid size institutions should be especially concern, due to the enormous cost from liabilities and class-action law suits, and the impact on their business. Reducing liabilities, will be one of the keys to success for businesses today and in the future.
It is advised, for members of a Board of Directors, Presidents, and Senior Level Executives/Managers of their institutions, to consult with an attorney concerning these laws, compliance standards for their industry, and how they apply to their institution.