Does Your Business Need Identity Theft Protection?

Raffa Financial ServicesRaffa Financial Services on 05/24/2018

Fraud. Identity theft. Data breaches.

You hear about these things all the time, but what’s the real risk? And what are the consequences if it happens to you or your employees? Do identity protection plans prevent this from happening or just help you deal with the fallout?

About the risk…

According to a study by Javelin Strategy & Research, approximately 15.4 million US consumers were victims of identity theft in 2016. The damage in dollars? About 16 billion. If you’re a person who likes to play the odds, that works out to roughly one in every 16 people, or just over 6%.

If this sounds like a risk you’re willing to take, consider that the number of reported incidents jumped up more than 16% last year and is expected to keep rising. Also consider the size of your workforce. Do you have more than 16 employees?

The harsh reality is that at some point, identity theft will very likely affect someone in your organization. Maybe even you.

Okay. But is this really an issue for my company?

If you’d like your employees to actually be able to show up and do their jobs, then yes.

Having your identity stolen can be extremely draining, emotionally and physically. A 2016 study from the Identity Theft Resource Center reported these rather unsettling statistics:

  • 74% of identity theft victims experienced an increase in stress
  • 69% feared for their financial security
  • 41% were dealing with sleep disturbances
  • 39% reported an inability to focus or concentrate
  • 10% indicated they were unable to go to work due to physical symptoms
  • 8% of victims reported feeling suicidal

But not only are employees more stressed out over their ID theft, they’re also spending large amounts of time trying to get things straightened out. And because many of the offices and agencies who assist with recovery keep regular business hours, much of it has to be done during the work day.  

What kind of time are we talking about here? Estimates range anywhere from 12 hours to well over 100. Depending on the severity of the case, it can take a few months or several years to clean up the mess.

A few more stats from the Identity Theft Resource Center:

  • 28% of victims reported taking time off work to deal with identity fraud
    • That number jumped to 55% for victims of criminal identity theft
  • 60% of respondents said they had already spent over 40 hours trying to clear their cases
    • Even with all those hours logged, 50% said they still hadn’t completed the process

That’s a lot of hours! And a whole lot of frustration, missed work, and lost productivity.

How does identity theft happen?

Let us count the ways…

Data breaches are a huge issue. They can happen at home, at work, or at your favorite retail store. Hacking and phishing schemes still work, and they’re getting smarter.

A stolen wallet. A lost phone or laptop. A shady friend or relative who has access to your information. The possibilities are endless.

What are identity thieves after?

Money, mostly. In a variety of forms. But also jobs, identification, and even healthcare!

All of these things can be accessed using YOUR personal information. Once someone gets ahold of it, they can charge up your credit cards, empty your bank account, take out loans, and open new credit card accounts.

Stolen social security numbers can be used to submit bogus tax returns, apply for jobs, or rack up large medical bills— using your benefits! In some cases, criminals have even given stolen information to police when being arrested. Imagine how that might mess with your day.

To make matters worse, it might not just be your SSN that people are after. Kids make especially easy targets because their social security numbers are new and squeaky clean. Children’s social security numbers can also be used to open bank accounts and credit cards, apply for loans, rent properties, and obtain official documents like a driver’s license or passport.

Imagine going with your son or daughter to apply for a driver’s license or school loan— only to be told they already have one. Yikes.

Can identity protection really help?

To be clear, there is no way to prevent the identity theft itself, but identity protection is one of the fastest growing voluntary benefits right now, and it does offer several valuable functions.

Monitoring: Credit monitoring is a huge factor in minimizing loss from identity theft. Keeping on top of multiple credit bureaus and looking for suspicious activity is the key to early detection. Yes, with a little time and diligence, you can do this yourself for free. But will you? Will your employees?

Alerts: Protection plans not only do the monitoring for you, they will let you know as soon as something changes on your report. If someone tries to open a new account or if something shows up in collections, you’ll know immediately.

Resolution: This might be the most attractive benefit for those of us who hate phone calls, paperwork, and taking time off work for things that don’t involve a lounge chair and a fruity drink. If you experience an ID theft and have coverage, you will be assigned a case worker who will spend those arduous 40+ hours getting your case resolved. How’s that for stress reduction?

Insurance: Some good news here! The Federal Government already includes protections for identity theft. If you report the theft within 2 days of discovery, your financial losses will be minimized. If you do opt for additional coverage, it will not cover stolen money or financial losses. It will cover out-of-pocket expenses such as postage, copying, notary costs, lost wages, or legal fees incurred while dealing with recovery.

Making the decision

Identity theft is a serious problem with significant negative fallout, both personally and professionally. And while there is no way to prevent it from happening, early detection can mitigate the damage and stress it causes.

Some people are super on top of their finances and hyper-aware of the dangers, but many are not. At the very least, offering identity protection as a voluntary benefit will help raise awareness of the issue and perhaps encourage people to be more proactive about prevention.

At best, choosing to provide identity protection for your staff will give you peace of mind, save your employees time, money, and heartache during a difficult time, and allow your business to continue running on all cylinders.     

 

There’s so much more to employee benefits than policies and premiums. A great benefits broker will make sure you, your employees, and your business are protected. Is your agent looking out for you?

 

Photo by chaliya

Want our business blogs delivered to you?

Enter your email address below to start receiving updates in your inbox!