One Bad Headline Can Be Costly. Are You At Risk?

Ominous headlines continue to enlighten, inform and alert us to the ever growing presence of data breaches, which can bring an identity theft into our lives at any time. As criminals continue to find ingenious ways to steal from us whatever they can, including the thing we most take for granted- our own identities–it becomes ever more apparent that our best defense is knowledge and awareness. Whether you are an employee or the owner of a business that stores sensitive information, you need to take precautionary steps to protect that information for all our sakes.

On June 1, 2005, a new provision of FACTA (Fair and Accurate Credit Transaction Act) went into effect. It says that any employer, whose action or inaction results in the loss of employee information, can be fined by federal and state government, and sued in civil court. As an employer –what this means, is that even if you take precautionary steps to insure the safety of your past, current, and future employees’ identities and their private information is stolen, under FACTA, you could be held responsible.


Aside from the ever growing reports of identity theft, data breaches or stolen laptops, let’s look more closely at what’s behind some other headlines…


“Liability for employee identity theft is growing!”
This headline points to a benchmark case in Michigan where, for the first time, a court found that a custodian of employee information has a duty to guard their employees’ data with scrupulous care. Employers can ultimately be held liable when personal information goes unprotected, is discarded without care, or identifying information is accessible to non-essential employees who shouldn’t have access to this information.


A bit of advice:

Consider a mandatory employee meeting or seminar that offers educational material, resources and services for identity theft prevention

Establish written procedures and guidelines for those employees who handle and have access to sensitive information The more time and effort you invest in preventing or detecting fraud, the less time, effort and money you will spend dealing with it when it hits.

“Banks Face Growing Threat of Inside Identity Theft”


While you’re busy building stronger defenses against outside scammers and hackers, you could be overlooking a potential danger right under your nose— inside thieves!


While this headline pertains to banks, in actuality, any business is at risk when a criminal is on the prowl for one of your employees and ready to offer them a “second job” with promises of a lucrative “second” income. Since criminals strive to be more innovative and resourceful, we must follow suit. All kinds of industries are at risk -restaurants, car dealerships, banks, universities, etc.; no establishment is immune to being infiltrated by thieves looking for a treasure chest of information they can turn into a profit.


All Businesses should…

Warn employees about criminals trying to “hire” them to do their illegal dirty work and consider offering employee awards or recognition for exposing or thwarting attempted frauds

Arm them with educational material and most importantly, make your company procedures and policies on this type of fraud known
“Car Dealers May Be Held Responsible for Identity Theft”


This headline refers to The Harris County (TX) District Attorney's Office which recently reported it was cracking down on identity theft when used to purchase cars, AND beware….the thieves aren't the prosecutors' only targets.


The prosecutors believe car dealerships should do more to prevent ID theft and “they could find [their] property seized” if they aren’t more diligent in combating identity theft in their dealerships. The DA’s stance? Too many identity thefts happen because “dealers aren't diligent” about checking buyers' credit records and identification to ensure the buyers are, in fact, who they say they are. The DA’s office went on to say that fraud alerts don’t work unless merchants pay attention to them. They believe that if consumers take the steps to place fraud alerts on their credit reports, and dealerships (or other merchants) don’t pay attention to the alerts, the merchant should be held liable.


It’s important to note that car dealers are often preferred targets of thieves.


Car dealers are finding themselves on the front lines of the war on identity theft. Car dealerships are as valuable to identity thieves as banks are to bank robbers.


Verifying a potential buyer’s identity can turn out to be more important than the sale of the vehicle itself. When a business is scammed, consumers lose trust and they take their business and their negative word of mouth with them.


The first step in preventing fraud in any business is to educate all employees, especially your "front line" employees, who are the decision makers. If you provide them with appropriate resources and sufficient guidance and information, they can be your most valuable allies in preventing fraud-related losses.


When if comes to identity theft or data breaches, the last thing you want to see is your name in the headlines.

Author's Bio: 

Denise Richardson is a longtime Consumer Advocate, Identity Theft Risk Management Specialist, and Author of the book, Give Me Back My Credit, and co-host of a Blog Talk Radio Network show Spotlight, a program designed to spotlight consumer related financial issues. Richardson is a member of the National Association of Consumer Advocates and Board member of the non-profit 501(3) (c) organization Americans Consumer Credit Education Support Services (ACCESS). To find out more information about identity theft, get tips on social networking sites and learn of the latest scams, visit her blog at www.givemebackmycredit.com


Additional Resources on Identity Theft can be found at:


Website Directory for Identity Theft
Articles on Identity Theft
Products for Identity Theft
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Denise Richardson, The Official Guide to Identity Theft