Employers Beware: 50 Percent of all Identity Thefts Reported from Work

It seems that every other day another company issues a press release announcing the loss of financial or health records of thousands or even millions of Americans. The news behind the headlines has a huge impact for employers.

The Federal Trade Commission estimates that more than 50 percent of identity thefts occur through the workplace, or are perpetrated by someone the victim knows. Recent legislation requires companies to notify the press when they experience loss or theft of information that compromises 1,000 or more identities. And the liability of identity theft can continue for years - even long after a compromised employee leaves the company.

Through the first 11 months of this year nearly 200 organizations have reported losses of personal information affecting at least 65 million employees, students, consumers, veterans, soldiers, nurses, patients, teachers, homeowners, taxpayers and children. The FTC reports that the average identity theft victim spends 177 to 300 hours repairing the damage, including a great deal of time during business hours, making identity theft a workplace productivity issue as well as a personal security concern.

Some startling identity theft statistics include:

• More than 30 million employee names and Social Security numbers have been lost by employers or their vendors in the past 12 months.

• As a percentage, the group at highest risk of ID theft earns less than $40k annually.

• If Identities are compromised by an employer, the liability never goes away because it may take years to be discovered and the dollar amount of the liability can often be more than $100,000 when costs and professional fees are considered.

•  Employees are worried about identity theft - 83 percent site it as a major concern.

• IT managers have long invested millions in systems that prevent intrusion by hackers rather than systems that simply detect an occurrence of intrusion and theft.

• ID theft has become a $50 billion problem forcing the government to step in trying to propose legislation to "freeze" personal information and credit accounts. The result is disagreement on what should be frozen, how to provide easy access to frozen information and limiting cost.

Consider  the major Midwestern company that had to notify more than 1,000 employees of lost personal data due to the negligence of an insurance provider. "The only thing we did wrong was partner with a company that ran a loose ship," notes the human resources manager. "That one incident in the long history of our company will forever change the way we do business."

Smart companies are emphasizing prevention, encouraging customers and employees to take proactive steps such as regularly reviewing their credit reports, checking bank and credit card statements for unusual activities, filing police reports and shredding mail. But credit industry leaders admit that these efforts are too little, too late.

"That doesn't protect consumers. It's not going to help and the public is starting to learn that," says Thomas Chapman, CEO of Equifax, one of the "big three" credit reporting agencies in the United States.

Companies looking to offer a benefit that addresses employees' concerns about ID theft, are now turning to LifeLock, an Arizona-based company that provides a system that "locks up" personal information and completely backs the service with a $1 million guarantee. While all others worry about how to clean up problems from ID theft, LifeLock concentrates on stopping the crime before it can cause havoc.

"If anyone tells you that this crime is under control or just hype, they really have no idea what they are talking about," says Todd Davis, LifeLock CEO and a Certified Identity Theft Risk Management Specialist. "The number of reported breaches has already surpassed that of previous years and everyone needs to understand that prevention is the only way to be safe."

LifeLock uses a combination of tactics that includes everything from setting and maintaining alerts that force banks to contact people directly before issuing credit to removing them from pre-approved credit card lists. As the only company with a program to protect children 15 and younger, LifeLock can work with any company to create a plan that is easy to implement and as cost effective as any other company-provided benefit.

"Employee satisfaction, recruitment and retention are major issues for employers," adds Davis. "When 83 percent of employees surveyed say that identity theft is a major concern, companies need to be listening. The answer to the problem isn't always throwing millions of dollars into new computers or security systems. Those investments won't help much when someone inside the company walks away with a file or a health partner loses information."  

Anyone interested in protecting themselves from potential identity theft stemming from the workplace or home can simply log on to www.lifelock.com. Type in the promotional code "worker" and receive the first 30 days free and 20 percent off the annual membership.

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