Small Businesses Are Held Liable In ID Theft Cases

by Antwoine Harris

Employers Have Liability In ID Theft Cases

If you put 100 people in a room and ask “Have you or do you know of anyone that has been a victim of identity theft?” Probably 90 to 100% of the room will raise their hands. This crime consumes an annual total of 10 million individuals. The cost of businesses and consumers range in the billions of dollars.

Let’s look at the cost of a traditional business if one of their employees becomes a victim. The average time spent by a victim to clear up this situation is 600 hours. How much of this time is spent during work hours? Unfortunately credit card companies and credit repositories are not open 24 hours a day. So victims are forced to take time off from work or try to spend all of their free time at work making telephone calls and worrying. This also makes employees very unproductive, which also can be a major cost to the company.

Laws to protect consumers

In order to slow down this epidemic, laws have been passed to protect consumers. These laws govern the protection of employees’ personal information in the workplace. We have all heard of the HIPAA Laws which regulates the use of medical information because we have to sign a statement at our private doctor and local hospitals. What about the F.A.C.T.A Law or the Gramm-Leach-Bliley Law? These are similar laws for other businesses which carries major fines as well as jail time for business owners and corporate executives if personal information is compromised?

These laws adhere to all companies even if you only employ one person. A small business owner can be devastated if they ever experience a computer breach or have a dishonest insider that jeopardizes personal information. Recently a Radio Shack in Texas was caught breaking these laws by dumping customer information into a dumpster. This usually happens when employees are not properly trained on the dangers of identity theft.

This is just one of many companies that have exposed the identities of consumers through employee mistakes, dishonest insiders and computer breaches . Millions of consumer and employees identities have been exposed in the last few years. Some companies such as BJ’s Wholesale and Choice Point have received huge fines for these breaches.

What should employers do?

Employers have to understand that this crime is becoming an epidemic and criminals are becoming smarter. The best thing for a small business owner to do is learn about these laws and get in compliance. The Federal Trade Commission has published a book titled Protecting Personal Information A Guide For Your Business. This book explains the steps to take to get in compliance with these laws.

There are other companies that will assist small businesses with protecting the person information of their employees. Companies, such as Pre Paid Legal Services Inc., have trained associates that come in and train your employees as well as help with your written plans and appointment of a security personnel. These Independent Associates do this for businesses at no cost to the employer.

Be proactive with the fight of this crime. Employees will be grateful knowing that their employer cares about the well being of their families. The small business will also show a “Good Faith Act” toward protecting the personal information of employees and customers. It is a win/ win for everyone.