Why businesses should care about identity theft

Identity theft is a type of fraud that’s directed squarely against individuals, but to believe that businesses don’t suffer any consequences or costs associated with it is simply wrong.

Identity theft effects

Identity theft effects

According to a recent survey about the aftermath of identity theft by the Identity Theft Resource Center, over half of the victims of identity theft that resulted in tax fraud had to borrow money from family and friends, and nearly half were were unable to meet their needs and went without. 32 percent of them had to request some form of government assistance, and some 13 percent had to obtain a payday loan.

“One of the worst ways identity theft has affected me is the ongoing feeling of persecution. And this feeling is exacerbated when January hits because my usual routine of doing my taxes the first week of March has been ruined,” one of the polled victims noted. “Now I HAVE to do them immediately for fear the person who used my name and SSN to file taxes may again do so. This means I have to get mine done earlier than I am comfortable doing. This whole thing has made me paranoid.”

Another victim noted: “It is a constant worry that someone may still use my information. I put a freeze on my accounts at the credit reporting agencies and any time I do anything requiring my score I have to unfreeze my information for release.”

And while identity theft has a obviously a devastating effect on the affected individuals, it also a considerable effect on their employers.

For example, a recent study that looked into the cost of phishing and value of employee training revealed that victims of identity theft take an average of 175 hours of company time to address their identity theft cases. If we divide this number by 8 (daily working hours), we get 21 working days that weren’t actually working days.

The employees may be physically present at work, but the distraction they experience due to the worry of whether and when they will be able to fix this problem and get back to their normal life will heavily impact their productivity.

“I was stressed out; put in a lot of time, lost sleep; experience intense emotions; affected work–had to take time off to act quickly (…)”, another victim pointed out.

The different types of identity theft

Identity theft takes different forms – employment- and tax-related fraud, bank fraud, credit card fraud, phone or utilities fraud – but the last few years, tax-related fraud has begun topping the list of most perpetrated frauds.

The IRS has responded by increasing its education and awareness campaign efforts, and there have been some results, but individuals and businesses have to also do their part.

The former are advised to file their taxes as soon as possible, keep themselves informed about the latest fraudulent schemes, protect their computers and mobile devices, avoid carrying around their Social Security card, avoid providing personal information over the phone or via email (and learn to recognize and avoid phishing calls and emails), and shred any tax-related documents that are no longer needed.

Businesses, on the other hand, would do well to invest in and deploy technology that can help stop the great majority of malicious emails and block malicious websites, but also in employee education.

“Educate the entire company on the different types of cyber risks (i.e., spearphishing, vishing, typosquatting, etc.) – particularly anyone in an administration, contact center, or IT group, and enhance routine security training. This training should be ongoing, as the security threat landscape is constantly changing,” Generali Global Assistance and the Identity Theft Resource Center advised in a recently released report.

“Educate employees about not clicking on links or opening attachments in emails that seem suspicious. If you don’t know the sender and they’re soliciting specific information, there’s a good chance it could be a phishing email. Your company should have specific guidelines in place so that employees know exactly how to report the incident.”

Not only will this education come handy to the employees at work, but the things they learn will help them keep safe in their private lives, as well.