Data Breaches and Identity Theft: What You Need to Know

calendar October 16, 2018

You hear about these things all the time, but what’s the real risk? What are the consequences if it happens to you or your employees? Do identity protection plans prevent this from happening or just help you deal with the fallout?

These are important questions. Let’s take a look at some answers.

The risk is real

According to research by Javelin, approximately 16.7 million consumers became victims of identity fraud in 2017. The damage in dollars? Nearly 17 billion. If you’re a person who likes to play the odds, that works out to roughly one in every 15 people, or about 6.6%.

If this sounds like a risk you’re willing to take, consider that the number of reported incidents jumped up more than 8% last year and is expected to keep rising. Also consider the size of your workforce. Do you have more than 15 employees?

The harsh reality is that at some point, identity theft will very likely affect someone in your organization. Maybe even you.

The effects are real

Having your identity stolen can be extremely draining, emotionally and physically. A study from the Identity Theft Resource Center reported these rather unsettling statistics:

  • 74% of identity theft victims experienced an increase in stress
  • 69% feared for their financial security
  • 39% reported an inability to focus or concentrate
  • 10% indicated they were unable to go to work due to physical symptoms
  • 8% of victims reported feeling suicidal

But not only are employees more stressed out over their ID theft, they’re also spending large amounts of time trying to get things straightened out.

According to Identity Theft Resource Center, 28% of victims reported taking time off work to deal with identity fraud, and 60% of respondents said they had already spent over 40 hours trying to clear their cases. And many of them weren’t done yet.

That’s a lot of hours! Not to mention frustration, missed work, and lost productivity.

How do these things happen?

The possibilities are endless.

Data breaches are a huge issue. They can happen at home, at work, or at your favorite retail store. A stolen wallet. A lost phone or laptop. A shady friend or relative. Hacking and phishing schemes still work— and they’re getting smarter.

Once someone has access to your information, they can charge up your credit cards, empty your bank account, take out loans, and open new credit card accounts.

Stolen social security numbers can be used to submit bogus tax returns, apply for jobs, or rack up large medical bills— using your benefits! In some cases, criminals have even given stolen information to police when being arrested. Imagine how that might mess with your day.

To make matters worse, it might not just be your SSN that people are after. Kids make especially easy targets because their social security numbers are new and squeaky clean. Children’s social security numbers can also be used to open bank accounts and credit cards, apply for loans, rent properties, and obtain official documents like a driver’s license or passport.

Imagine going with your son or daughter to apply for a driver’s license or school loan— only to be told they already have one. Yikes.

What can you do about it?

To be clear, there is no way to prevent identity theft itself. But there are reasons identity theft protection is one of the fastest growing voluntary benefits.

It offers several valuable functions:

Credit Monitoring: This is a huge factor in minimizing losses from identity theft. Keeping on top of multiple credit bureaus and looking for suspicious activity is the key to early detection. Yes, with a little time and diligence, you can do this yourself for free. But will you? Will your employees?

Consumer alerts: Protection plans not only do the monitoring for you, they will let you know as soon as something changes on your report. If someone tries to open a new account or if something shows up in collections, you’ll know immediately.

Problem solving: This might be the most attractive benefit for those of us who hate phone calls, paperwork, and taking time off work for things that don’t involve sunsets and sandy beaches. If you experience identity theft and have coverage, you will be assigned a case worker who will spend those arduous 40+ hours getting your case resolved on your behalf. How’s that for stress reduction?

Should you offer identity theft protection?

Identity theft is a serious problem with significant negative fallout, both personally and professionally. And while there is no way to prevent it from happening, early detection can mitigate the damage and stress it causes.

Some people are super on top of their finances and hyper-aware of the dangers, but many are not. At the very least, offering identity protection as a voluntary benefit will help raise awareness of the issue and perhaps encourage people to be more proactive about prevention.

At best, choosing to provide identity protection for your staff will give you peace of mind, save your employees time, money, and heartache during a difficult time, and allow your business to continue running smoothly.

Is your benefits broker also a compliance consultant? How about a trusted business partner? Are you confident your policies and processes are doing what they need to ensure that your company—and your employees— are healthy and productive? At Combined, this is what we do for Los Angeles employers every single day. CONTACT US NOW