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Risk Managers Presentation
 

Risk Managers Presentation

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Risk Managers Presentation Risk Managers Presentation Presentation Transcript

  • * 2003 FTC Report America’s fastest growing white collar crime * you Could be at risk? you Could be at risk?
  • What is Identity Theft? Jan. 29, 2005 A Chicago woman “applied for a job at a local Target department store and was denied. The reason? She already worked there – or rather, her Social Security number already worked there. Follow-up investigation revealed the same Social Security Number … used to obtain work at 37 other employers.” The Secret List of ID Theft Victims “ People need to wake up to this problem. They are destroying people’s credit, Social Security benefits, and everything else.”
    • What is Identity Theft?
    • The Cost of Identity Theft
    • Important Legislation
    • Industry Response
    • The Best Answer
    • Action Steps
  • The Facts What is Identity Theft? ID entity T heft
  • Identity Theft is not just about Credit Cards! ID Theft is an international crime and access to an attorney may be critical Five Common Types of Identity Theft What is Identity Theft? Drivers License Identity Theft Medical Identity Theft Financial Identity Theft Social Security Identity Theft Character / Criminal Identity Theft
  • Driver’s License Identity Theft
      • Thieves use your information to acquire a driver’s licenses in your name or claim to be you during a traffic stop
    • You could receive DWI, DUI, and other driving-related charges
    • Your driving privileges could be suspended or revoked
    • You could be arrested during a routine traffic stop for crimes you did not commit
    What is Identity Theft?
  • What is Identity Theft? “the Department has discovered that identification information in your file is inconsistent with corresponding records at the Federal Social Security Administration … Before your document can be renewed, any inconsistencies will need to be corrected. You will need to present legal documents that certify your current legal name, social security number and date of birth.”
  • What is Identity Theft? February 2004 “ An 82-year-old grandmother, quit driving during the Truman administration.” In 2001 she “suddenly found herself in what she describes as a ‘living hell’ after one of her neighbors, arrested on drunk-driving charges … pretended to be her. ‘I was told there were warrants for my arrest … I was afraid to answer the phone’.”
  • Social Security (SSN) Identity Theft
      • Thieves use your SSN Identity to gain employment or to report income under your name
    What is Identity Theft? Your SIN in Canada
    • Thieves take the income, but don’t pay the taxes, leaving you with the bill
    • Wanted criminals use your SSN Identity so they can get employment without being found
    • Illegal immigrants use your SSN Identity to gain employment.
    • Thieves and Criminals use your SSN for employment, medical, financial, criminal, school, and other purposes.
  • Medical Identity Theft
      • Thieves use your information for insurance benefits, R x , Medicare, Medicaid benefits, or for medical tests
    What is Identity Theft?
    • Your rates could go up or your coverage could be cancelled or used up
    • You could owe thousands of dollars for a procedure you never had
    • You could be unable to obtain medical or life insurance, other coverage, and/or employment because of conditions that you do not have (AIDS, Diabetes etc…)
  • “If the person who steals your health identity has allergies or specific medical conditions that collide with yours for instance … when you go in for care, you may experience a dangerous drug interaction or unknowingly be denied potentially lifesaving medications or treatments because they will assume the thief’s medical information is yours.*” What is Identity Theft? Sept. 2005 *Carole Pennington 9/7/2005 “As the health care system transitions from paper-based to electronic, this crime may become easier to commit and harder to trace. Victims may find it more difficult to recover from medical identity theft as medical errors are disseminated and redisseminated through computer networks and other medical information-sharing pathways.*” May 2006 *Pam Dixon, Pg 3.,5/3/2006 Medical Identity Theft: The information crime that can kill you
  • Character / Criminal Identity Theft
    • You could be arrested
    • You could be denied employment because of fraudulent criminal records found during routine background checks
    • Security checkpoints at airports could become a nightmare for you
    • You could be denied a passport and be barred from leaving the country
      • Thieves mask their criminal activity behind your identity
    What is Identity Theft?
  • * Cover, Kiplinger, October, 2005 What is Identity Theft? The October 2005 issue of Kiplinger’s Personal Finance portrayed a different side of Identity Theft when they devoted an entire section to character/criminal identity theft. “ Identity Theft Update: Could losing your wallet land you in jail?*” October 2005
  • Financial Identity Theft
    • Thieves rob your accounts
    • They rack up outrageous charges on credit cards, take out new loans, and more
    • They destroy your credit, forcing you to pay higher rates
    • You can absolutely be held responsible for the debts incurred by the thieves in your name
      • Thieves use your information to open new accounts or to gain access to existing accounts
    What is Identity Theft?
  • Order the Federal Trade Commission free report Take Charge: Fighting Back Against Identity Theft Phone: 877.IDTHEFT Web: http://www.consumer.gov/idtheft When you read this, it will become crystal clear why it is good for the company and the employee to have an ID Theft service that offers Legal Access, Monitoring, and Restoration versus resolution or reimbursement. What is Identity Theft?
  • What is Identity Theft? *Pg. 19
    • “ The Fair Credit Billing Act establishes procedures for resolving billing errors on your credit … accounts … To Take Advantage of the law’s consumer protection, you must:”
    • send your letter so that it reaches the creditor within 60 days. If an identity thief changes the address on your account and you didn’t receive the bill, your dispute letter still must reach the creditor within 60 days of when the creditor would have mailed the bill.*” … or you owe the money.
    See page 13 for additional information
  • What is Identity Theft? February 2004 ID Theft Victims Face Tough Bank Fights*
    • In 2003, The Korinke family was sued by Homecoming Financial Network INC., a division of GMAC, for $75,000, plus attorney fees.
    • In 2001, an imposter got hold of a line of credit, switched the address, and the Korinkes never received the outstanding bills.
    • Homecomings … claimed the Korinkes had been negligent. “The Korinkes were slow to discover and report the identity theft … as such, Korinke is liable for any and all sums attributed to his negligence.**”
    • Korinke’s attorney said “ victims who don’t have the means to find a good lawyer, may be losing out in battles with financial institutions.***”
    *2/18/04 ** Pg.2 *** Pg. 3
  • “ Each year, 7 to 10 million Americans fall prey to Identity Theft… From massive data-brokerage firms to tiny local banks, your identity is irretrievably ‘ out there. ’ ” What is Identity Theft?
  • What is Identity Theft? The DataBased You Meet The DataBased You ™ ™
  • What is Identity Theft? Your Name 1000’s of aggregators Your Fingerprints and DNA FBI, State, and Local DBS Your Insurance Claims C.L.U.E. DBS, etc... Your Military Record DOD DBS Your Criminal History NCIC DBS Your Real Estate Deeds Clerks of Court DBS Your Legal History State and Federal Court DBS Your Credit History Credit Repositories’ DBS Your Birth Certificate Choice Point DBS, State, etc … Your Phone Number and Tracking Info 1000’s of aggregators Your Social Security Number SSA DBS Your Address 1000’s of DBS The DataBased You ™ Your Driver’s License # and Record – DMV DBS Your Medical Records MIB DBS, etc … Your Car Registration & Info DMV, Local Treasurer, On Star, etc … DBS
  • Whether it was hacking, lost computers or lost data tapes, there were 84,797,096* records lost due to computer data breeches from major companies. Between Feb. 15 th 2005 and June 2 nd , 2006: The DataBased You ™ ™ What is Identity Theft? privacyrights.org
  • Lost, Hacked, or Stolen… Notables You can’t control The DataBased You
    • ChoicePoint: 145,000
    • CitiFinancial: 3.9 Million
    • MasterCard: 40 Million
    • AOL: 92 Million
    • Veterans Admin: 26.5 Million
    • Bank of America: 1.2 Million
    • Acxiom: 1.2 Billion
    ™ What is Identity Theft? So many laptops … we lost count i.e. Hotels.com (Ernst & Young)
  • What is Identity Theft? October 2005 “ Identity thieves are increasingly finding their jackpot is not in your mailbox or kitchen trash bag, but the computer files stored at your chiropractor, accountant or doctor … the future is not burglaries of your home, but of dentists, CPA’s, insurers etc …*” ID Fraudsters Stay One Step Ahead * MarketWatch, October 2cd, 2005
  • The Facts The Cost of Identity Theft ID entity T heft
  • The Cost to Individuals
    • The average dollar amount charged in Identity Theft: $92,893
    • The average number of checks written in Identity Theft: 74.6
    • The average number of credit card applications approved through Identity Theft: 8.4
    Laws hold victims partially responsible for fraudulent debt after 48 hours, and hold them fully responsible if not reported within 60 days… The Cost of Identity Theft
  • The Cost to Businesses
    • Employees can take up to 600 hours , mainly during business hours, to restore their identities
    • “If you experience a security breach, 20 percent of your affected customer base will no longer do business with you, 40 percent will consider ending the relationship, and 5 percent will be hiring lawyers!*”
    • “When it comes to cleaning up this mess, companies on average spend 1,600 work hours per incident at a cost of $40,000 to $92,000 per victim.*”
    The Cost of Identity Theft * CIO Magazine, The Coming Pandemic , Michael Freidenberg, May 15 th , 2006
  • “ People whose identities have been stolen can spend months or years and thousands of dollars cleaning up the mess the thieves have made of their good name and credit record” “ When Bad Things Happen to Your Good Name ” — September 2002 The Cost of Identity Theft FEDERAL TRADE COMMISSION
  • According to the USA Today, Identity Theft is the number one criminal concern for law enforcement over the next decade. The Cost of Identity Theft
  • “ Thieves are so bold that they held a conference in Kiev, Ukraine, for people interested in breaking into this Growth Industry” The Cost of Identity Theft
  • The Trends Important Legislation ID entity T heft
  • Disclaimer
    • The laws discussed in this presentation are, like most laws, constantly amended and interpreted through legal and social challenges. You are encouraged to review the laws and draw your own conclusions through independent research.
    • The instructor is not an attorney, and the information provided is not to be taken as legal advice.
    Important Legislation Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You
    • F.A.C.T.A.
    • HIPAA Security Rule
    • Gramm, Leach, Bliley Safeguard Rule
    • Individual State Laws (i.e. Texas Whistle Blower Statute)
    Important Legislation… Important Legislation Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You
    • Applies To Every Business And Individual Who Maintains, Or Otherwise Possesses, Consumer Information For A Business Purpose.
    • Employee or Customer information lost under the wrong set of circumstances may result in:
    • Federal and State Fines of $2500 per occurrence
    • Civil Liability of $1000 per occurrence
    • Class action Lawsuits with no statutory limitation
    • Responsible for actual losses of Individual ($92,893 Avg.)
    Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You Fair and Accurate Credit Transactions Act (FACTA) Important Legislation
    • 8 Federal Agencies and any State can enforce this law
    • Applies To Any Organization That Maintains Personal Financial Information Regarding It’s Clients Or Customers
    • Non Public Information (NPI) lost under the wrong set of circumstances may result in:
    • Fines up to $1,000,000 per occurrence
    • Up to 10 Years Jail Time for Executives
    • Removal of management
    • Executives within an organization can be held accountable for non-compliance both civilly and criminally
    Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You Gramm, Leach, Bliley Safeguard Rule Important Legislation
  • Important Legislation Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You Gramm, Leach, Bliley Safeguard Rule Any Organization Includes:
    • Financial Institutions*
    • Schools
    • Credit Card Firms
    • Insurance Companies
    • Lenders
    • Brokers
    • Car Dealers
    • Accountants
    • Financial Planners
    • Real Estate Agents
    *The FTC categorizes an impressive list of businesses as FI and these so-called “non-bank” businesses comprise a huge array of firms that may be unaware they are subject to GLB.
  • HIPAA Security Rule
    • April 21, 2005 - Scope broadens on April 21, 2006
    • Applies To Any Organization Or Individuals Who Retain Or Collect Health Information.
    • Medical information lost under the wrong set of circumstances may result in:
    • Fines up to $250,000 per occurrence
    • Up to 10 Years Jail Time for Executives
    Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You Important Legislation
    • Require:
    • Appointment of an Information Security Officer
    • Have a written policy to protect NPI
    • Mandatory Training for employees who have access to NPI
    Important Legislation Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You The Safeguard and The Security Rule
  • * Pg 81, Alberta Venture, Display Until November 11, 2005 “ They’re not after your money, your equipment, or your inventory. A new breed of criminal wants the personal information you keep on customers, suppliers and employees. And if you lose it, you’ll wish they went for the cash. ” The October 2005 issue of the Alberta Venture (business journal) talked about a new breed of criminal. Important Legislation
  • The Facts Industry Response ID entity T heft
  • Reimbursement Policies
    • Reimbursement policies are not proactive and some ID Theft problems cannot be corrected after the fact (such as arrest records, etc...) …
    • You must pay out of pocket first (up to 25,000 in some instances), then file a claim, and then hope for an underwriters approval for reimbursement. This process can take weeks or months and be very frustrating …
    • Your insurance agent does not do the work for you…
    • You carry the full burden of clearing your name…
    These policies play a part, but they only help after you become aware of the theft… Reimbursement policies do not pay for the fraudulent losses, yet many think they do… Industry Response
  • Monitoring Services
    • Monitoring helps primarily with Financial Identity Theft
    • Monitoring services often cover only the accounts you have with the company offering the service
    • Monitoring services do just that, Monitor. They notify you that the nightmare is beginning but do nothing to help you. The real headache associated with Identity Theft is the cost of the 600 Hours* it takes you to restore your identity.
    Monitoring credit activity is the single best method to detect identity theft, but … Industry Response * USA Today Estimate, January 2005
  • Resolution Services
    • These services only provide guidance , leaving you to clear your good name
    • It takes you an average of 600 hours of work to clear your name, if you ever do…
    Resolution Services provide phone consultation for you, which is vital , but it is not enough… Professionals steal identities. Doesn’t it just make sense to have professionals restore those identities? Industry Response
  • Restoration Services
    • Restoration means that experienced professionals — not you — do the work to clear your name
    • These services can save hundreds, possibly thousands of hours of work…
    Restoration Services provide tremendous relief to you Industry Response Restoration Services provide incredible support, but they do not include monitoring services or legal help, particularly 24-hour legal access in the event you are being arrested …
  • The Facts The Best Answer ID entity T heft
  • Monitoring Services Life Events Legal Plan Restoration Services You The Best Answer … The Complete Wall of Protection The Best Answer
  • Pre-Paid Legal Services ® , Inc. is the only company with a suite of products that provides help in every area of Identity Theft – before, during, and after the crime occurs… The Best Answer
    • FACTA
    • HIPAA Security Rule
    • Gramm, Leach, Bliley Safeguard Rule
    Important Legislation…
    • Offer PPLSI Suite of Products
    • Employee Confidentiality Document
    The Best Answer Responsive Strategy…
  •  
  • The Best Answer Five Areas of Coverage – Life Events Legal Plan Preventive Legal Services Motor Vehicle Legal Services Trial Defense Services Federal Tax Audit Legal Service Other Legal Services 25%
  • The Legal Shield service will not apply if the member is alleged to be under the influence of or impaired by alcohol, intoxicants, controlled substances, chemicals or medicines, whether prescribed or not; the member is alleged to be involved with domestic violence or stalking; and/or the member is being detained for outstanding warrants. Check benefit availability in your state. Legal Shield The Legal Shield gives you and your family 24-hour access to legal consultation if you are detained, for only $1 a month - as an additional benefit to your Family Plan membership. To contact your Provider Law Firm, simply call the toll-free number on your Legal Shield card. You will reach the Pre-Paid Legal offices, who will then put you in contact with your Provider Law Firm, so you can consult with an attorney about your detainment. It’s that easy. The Best Answer
  • Pre-Paid Legal Services ® , Inc. and Kroll Background America provide The Best Answer: Harland C. Stonecipher CEO and Founder, Pre-Paid Legal Services, Inc. The Best Answer SHIELD ID entity T heft TM with the Pre-Paid Legal Plan
  • Three Areas of Coverage for ID Theft The Best Answer Access to Counsel Restoration Services Continuous Monitoring
    • May Reduce Company Losses
    Why and How We Help You… The plan has Full Restoration*, which means the majority of the time in restoring an employee’s identity is covered by the membership and not done on company time and/or company expense. Also, use of our Life Events Legal Plan provides help* that addresses 100% of the problem. * Subject To Terms And Conditions The Best Answer
    • Potential Early Warning System
    If a number of your employees get notified of improper usage of their identities, this may act as an early warning system to your company of a possible internal breach. Why and How We Help You… The Best Answer
    • Employees Feel More Valuable
    Why and How We Help You… “ One solution that provides an affirmative defense against potential fines, fees, and lawsuits is to offer some sort of identity theft protection as an employee benefit. An employer can choose whether or not to pay for this benefit. The key is to make the protection available, and have a mandatory employee meeting on identity theft and the protection you are making available, similar to what most employers do for health insurance … Greg Roderick, CEO of Frontier Management, says that his employees "feel like the company's valuing them more, and it's very personal." Business and Legal Reports 1/19/2006 The Best Answer
    • Mitigating Damages
    Why and How We Help You…
    • It makes Employees aware of their legal responsibilities to protect NPI
    • It serves as proof that handlers of NPI have been through some the mandatory training required by law
    To protect yourself, you could have all employees sign this document… Be Sure To Check With Your Attorney Before Using A Form Such As This The Best Answer Use of Confidential Information by Employee
  • Be Sure To Check With Your Attorney Before Using A Form Such As This The Best Answer
    • Acts as a Good Faith step in attempting to comply with FACTA, GLB, HIPAA, etc …
    Be Sure To Check With Your Attorney Before Using A Form Such As This According to Betsy Broder of the FTC, “We will act against businesses that fail to protect their data … She understands that most small businesses cannot be expected to hire a full time privacy specialists but adds that all businesses must be able to show they have a security plan in place. “We’re not looking for a perfect system .. But we need to see that you’ve taken reasonable steps to protect your customers’ information”. March 2006 – “Stolen Lives” Employee Confidentiality Document The Best Answer Use of Confidential Information by Employee
  • The Facts Action Steps ID entity T heft
    • Get a firm understanding of the Important Legislation we talked about today.
    • A great site with a tremendous amount of information is the FTC PUBS index: http://www.ftc.gov/bcp/conline/pubs/
    • F.A.C.T.A: www.ftc.gov/os/2004/11/041118disposalfrn.pdf
    • HIPAA: www.hipaa.org
    • Gramm-Leach-Bliley Act: www.ftc.gov/os/2002/05/67fr36585.pdf
    • Two great resources for white papers: www.omnirim.com www.recall.com
    Action Steps Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You
  • Action Steps
    • Based on provisions in HIPAA and Gramm-Leach-Bliley, appoint a Information Security Officer.
    • Set an appointment before you leave so that you have dual records that “Good Faith” measures are in process. Confirm in writing and keep and copy when you get back to office for your protection .
    • Review Employee Confidentiality Form and everything else you have questions on with your counsel.
    Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You
  • Pre-Paid Legal Services ® , Inc. and subsidiaries Thank You! Pre-Paid Legal Services, Inc.