Identity Theft in the Workplace

A customer storms into your office. Someone has gotten hold of her personal information, set up accounts in her name and ruined her credit. She blames you, claiming that the identity thief is an employee who pilfered her personal information from a company database.

Welcome to the information age, where such scenarios are increasingly probable. Identity theft is one of the fastest-growing white-collar crimes in the nation. According to the Federal Trade Commission (FTC), incidents increased 233% between 1998 and 1999, and hotline calls doubled, from 400 per week in November 1999 to recent weekly totals of 800 to 850. Cases of Social Security number abuse, most of which involve identity theft, soared from 7,868 in 1997 to more than 30,000 in 1999. When all types of cases of identity fraud are considered, they occur at a rate of about 1,300 per day in the U.S. These types of crimes cost businesses, the government and consumers about $24 billion each year.

Even worse, "fraud clusters" - wherein groups of people are victimized - are cropping up in the workplace. Such crimes are usually inside jobs, the FTC's Bureau of Consumer Protection says. With access to personal information, identity thieves can victimize both coworkers and customers. For example, an employee of AAA Auto Club South in Tampa, FL, recently received a three-year prison sentence for obtaining and misusing member information obtained from the company's national database. It turns out that the woman had been committing such crimes for more than four years and had stolen personal information from as many as 375 individuals.

"The workplace is central to the problem," notes Linda Goodman-Foley, head of the Identity Theft Resource Center. She suggests that HR can reduce risks. One step is evaluating the security of in/out boxes and mailrooms (the U.S. Postal Inspection Service is calling identity theft the crime of the new millennium). If HR professionals aren't careful about what they discuss or where they conduct conversations, potential thieves could gain sensitive information just by listening in. And in close quarters and cubicle situations, it could be easy to get information from other workers' computer monitors.

Employers might want to broaden screening procedures, conduct more in-depth background checks, and ensure that third-party firms – vendors, staffing firms, and others with access to employee or client information – are equally vigilant. Goodman-Foley notes that establishing a document-handling policy and using worker identification numbers rather than individuals' Social Security numbers are two keys to preventing identity theft.

HR professionals may also need to become more wary of job applicants using assumed names. After all, fake IDs are widely available from online sources, with about 500 Web sites selling such products. Those who misrepresent themselves may, in fact, be identity thieves hoping to steal customer or employee information. These days, anyone in charge of hiring should have some training in recognizing false identities.

HR can also plan to assist victims if identity theft strikes the workforce. Employees may first learn they've been victimized when they start receiving calls from creditors at work. Stolen personal information is most often used to commit credit card fraud, experts say, but thieves may also establish phone or utility accounts, open bank accounts or take out loans. Goodman-Foley estimates that, on the average, a victim may need to devote 175 hours to sorting matters out and repairing the damage. And whether or not a theft is work-related, such crimes threaten individual and family credit and could negatively impact productivity. HR may want to establish a victim assistance plan, which might include referring individuals to an EAP, providing emergency financial assistance and/or offering links to resources and organizations specializing in identity theft.

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The following online resources might be useful sources of information about identity theft:

The FTC's identity-fraud hotline – (877) 438-4338 – and its Web site – http://www.consumer.gov/idtheft – offer information about federal and state law, the procedure for filing a complaint, legal cases and the FTC's victim-assistance workshop.

The Privacy Rights Clearinghouse provides information about identity theft at
http://privacyrights.org/.

The Identity Theft Resource Center, an affiliate project of the Privacy Rights Clearinghouse, offers information at
http://privacyrights.org/itrc.htm.