Identity theft threat: Real or hype?
May 10, 2010
As I began to research the topic of identity theft, a search of the subject resulted in more 25 million websites and thousands of books that include a wealth of petrifying stories. The subject of identity theft is important to the individual as well as to the business owner.
According to Michael McCoy and Steffen Schmidt, authors of “The Silent Crime,” there is a thin line in matching a person to their bank accounts, social security number, credit cards, drivers’ license, and medical records. A person’s identity is being reduced to mere numbers on a card with an occasional photo card that can easily be duplicated with the explosion of the Internet. Unfortunately, it is only a matter of “when” our identity will be compromised, not “if.”
The impact of identity theft has far-reaching consequences, not only on financial transactions but medical, social security systems and driver’s licenses. There is another form of identity theft called synthetic identity theft according to industry experts. This is when information from three individuals is combined into one driver’s license or other legal document. Multiple individuals are affected by the theft.
The impact to a business can be two-fold. When an individual has their identity stolen it can take significant time and resources to undo the damage; which translates to time off from work or, if at work, not being able to function because the mind is not on the task at hand. The cost to the business owner is loss of productivity that will impact sales and cause additional expenses.
For the business owner whose identity is stolen, it can translate to the loss of customers, suppliers denying credit, and lost time spent on non-income producing activity. Unfortunately, it can also impact access to capital by causing higher costs to obtain credit as stated by Calvin Davis, Special Assistant U.S. Attorney for the U.S. Small Business Administration (Protecting Your Financial Health, March 2010).
One way to possibly limit the threat is continuous monitoring of financial transactions. However, this type of monitoring has no effect on the other forms of identity theft. There is not a plan available that can absolutely guarantee and deliver total prevention of identity theft. A plan that monitors, restores a person’s identity to the place before the crime took place with minimal time and effort expended by the victim and offer legal assistance is a wise investment. The plan should cover adult members of the family as well as minor children.