Identity Theft is the fastest growing white collar crime in the world. In 2006 over 88 Million records containing Non-Public Information of employees, customers and vendors were lost by businesses and in 2007 that amount increased 40% to 124 Million. In 2008 the number of breaches exceeded the total in 2007 by 47% and over 285 million reords were exposed. Of those records lost 70% were a result of negligence on behalf of the business, employee error and/or employee theft. The July/August 2006 issue of The Corporate Board Member, reported the next target for Class-Action Lawyers to go after, will be companies with access to sensitive data about customers and employees.
This means that every business is in jeopardy.
Over the last 10 years, there have been numerous Federal and State Laws and Acts that have been passed, which have placed numerous restrictions on business to protect customer and employee NPI (Non Public Information). Some of the most important Acts today are:
- FACTA (Fair and Accurate Credit Transaction Act)
- HIPPA (Health Insurance Portability and Accountability Act)
- Gramm-Leach-Bliley Act
- Fair Credit Reporting Act
- Red Flag Rules
- Individual State laws (Michigan Senate Bill 309)
A recent survey showed that 87% of all businesses surveyed had not heard of FACTA and of the 13% who had, the majority were unfamiliar with what was required of them under the Act. The FTC has developed a very informative slide show and video on this subject. Please visit Cost to Business of a Data Breach In 2008 the average cost per record to the business was $202. The notification cost was between $.80 and $1.40 per letter. The new Red Flag Laws went into effect on November 1, 2008 but the FTC has postponed enforcement till May 1, 2009 in order to give businesses the time necessary to have their programs in place and their employees trained. We also offer:
www.ftc.gov/bcp/conline/edcams/infosecurity/teach.html and watch the video and look at the power point presentation.
44 States, the District of Columbia and Puerto Rico have enacted legislation requiring notification of security breaches.
For a list of the states and laws please see:
http://www.ncsl.org/programs/lis/cip/priv/breachlaws.htm
In 2007 a study conducted by the Ponemon Institute reported that organizations experiencing a data breach incurred costs in the following areas:
74% reported loss of customers
59% faced potential litigation
33% faced potential fines
32% experienced a decline in share value
Direct Costs that your business can face from a data breach:
Customer Notification
FTC Fines
Law Suits
Higher Insurance Premiums
Forensic Costs
Attorney Fees
Court Fees
Indirect Costs
Damaged Brand or Reputation
Diminishing New Accounts
Bad Press
Damage control rather than corporate growth strategies
Red Flag Law
(See the Red Flag Page for more information on this new law).
How Can We Help
We will perform a Risk Assessment of your business and assist in the:
