What is identity theft?

What is identity

theft?

i·den·ti·ty theft

noun

the illegal use of someone else's personal identifying information (such as a Social Security number) in order to get money or credit

Why Offer

ID Protection as

a Benefit?

CHANCES OF A 40-YEAR-OLD MALE

Diagnosed with invasive cancer

1 in 678

Having a life insurance claim

1 in 409

Victimized by identity theft or fraud

1 in 20

Why Offer

ID Protection as

a Benefit?

39% of employees*

said they would be very likely or likely to purchase identity theft protection through payroll reduction

* Excludes those who already have identity theft protection through their employer

National

Perspective

Source: CBS News, July 2014

The Latest

Research

Source: Javelin Strategy& Research

ACCORDING TO THE MOST RECENT IDENTITY FRAUD STUDY RELEASED IN MARCH 2015

Fraudsters stole

$16 billion

from 12.7 million U.S. consumers in 2014

There’s a new identity fraud victim

every 2 seconds

posing significant risk to consumers

Two-thirds

of identity fraud victims in 2014 had previously received a data breach notification in the same year

12.7 Million

Identity Fraud

Victims, While

Fraud Losses

Decline in 2014

Source: Javelin Strategy & Research

Key Takeaway

The occurrence of identity fraud hasn’t changed much over the past year, and it is still a significant problem. Consumers, financial institutions and retailers are all taking aggressive steps, yet we must remain vigilant. The criminals will continue to find new ways to commit fraud, so taking advantage of available technology and services to protect against, detect and

resolve identity fraud is a must for all individuals and corporations.

Al Pascual, Director of Fraud & Security, Javelin Strategy & Research

“

Top ID Theft

States, 2014

Source: FTC Consumer Sentinel Network Data Book & 24/7 Wall Street

Top ID Theft

States, 2014

Source: 2012 FTC Consumer Sentinel Network Data Book & 24/7 Wall Street

Per 100,000 People

STATE ID THEFT COMPLAINTS

Florida 186.3 Washington 154.8 Oregon 124.6 Missouri 118.7 Georgia 112.7 Michigan 104.3 California 100.5 Nevada 100.2 Arizona 96.0

State

Perspective:

Florida

Source: WPLG-TV (Miami),

Security

Breaches by

Sector

Source: Identity Theft Resource Center, Data Breach Reports, July 2015 INDUSTRY # of Breaches # of Records % of Records Banking/Financial 40 408,377 0.3% Business 171 461,712 0.4% Educational 35 728,318 0.6% Government/Military 31 27,091,057 20.9% Medical/Healthcare 147 100,959,003 77.9% TOTALS 424 129,648,467 100%

Government

Increasingly

Targeted

According to the IRS, hackers stole personal information from

Major

Breaches in the

USA

80 Million

in 2015

56 Million

in 2014

40 Million

in 2013

Records Reported:

78,800,000

Date: February 2015

Hackers gained access to a corporate database containing personal information on the health insurer's current and former customers and employees

Major

Breaches in the

Records Reported:

21,500,000

Date: June 2015

Hackers gained access to the records of current and former civilian employees of the federal government

Major

Breaches in the

‘The Largest

Healthcare

Breach to Date’

Source: KPRC-TV (Houston), February 2015

Trends:

Medical ID Theft

Medical identity theft occurs when someone steals your personal information (like your name, Social Security number, or Medicare number) to obtain medical care, buy drugs, or submit fake billings to Medicare in your name.

Office of Inspector General, U.S. Department of Health & Human Services

“

”

FACT: Nearly

78%

of records

breached so far in 2015 were in

the medical/healthcare sectors

Trends:

Child ID Theft

to apply for government benefits, open bank and credit card accounts, apply for a loan or utility service, or rent a place to live. Many school forms require personal and, sometimes, sensitive information.

Federal Trade Commission

Trends:

Child ID Theft

Source: WLS-TV (Chicago), April 2015

1998

Congress passes the Identity Theft and Assumption Deterrence Act making it a federal crime to “knowingly transfer or use, without lawful authority” another person’s identity

2004

Congress passes the Identity Theft Penalty Enhancement Act, establishing penalties for aggravated identity theft — the use of a person’s identity to commit felony crimes

Federal

Response

Source: Federal Bureau of

State

Responses

Source: National Conference

of State Legislatures

Every state has a law regarding identity theft or impersonation.

Thirty-one states and the District of Columbia have specific restitution provisions for identity theft

The

Ultimate

Solution

COMMERCIAL SOLUTIONS

•

Direct-to-consumer offerings

•

Employer-sponsored benefits

What Should

Employers

Consider?

In selecting an ID theft protection service provider, employers and HR professionals should weigh the following

characteristics and capabilities:

PROACTIVE APPROACH

(Recommended) REACTIVE APPROACH

Service provider's data repository access allows it to prevent unauthorized financial transactions

ID theft cannot be prevented with a reactive approach

ID MONITORING (Recommended) CREDIT MONITORING Goes beyond traditional credit data to

detect and reduce fraud by monitoring public and criminal records, new account applications, black-market web sites, and other sources

Tracks changes reported to credit bureaus

What Should

Employers

Consider?

(Recommended)

ID theft restoration is handled on behalf of the member, through a limited power of attorney

The member is provided with a packet and some guidance/tools on how to restore ID on their own

SERVICE GUARANTEE

(Recommended) INSURANCE

If a member becomes a victim of identity theft, the service provider will spend up to a guaranteed amount hiring attorneys, investigators and other experts to restore the stolen identity

a member becomes a victim of identity theft, the service provide will reimburse the member for out-of-pocket expenses (within limits) to restore the stolen identity

The Ideal

Provider

Name Recognition

Measurable Financial Strength

Comprehensive Services

Pricing

Payroll Deduction

Proactive Approach

Never Sells Member Data

100% ID Theft Focused

Access to Data

Repositories is

Critical

Source: Bloomberg Businessweek

•

Credit card applications

•

Wireless accounts

•

Mortgage applications

According to Deutsche Bank, real-time analytics is

4

of top five

U.S. credit card

issuers

Credit

4

of top five

U.S. wireless

providers

Wireless

4

of top six

U.S. financial

institutions

Financial

Classic

Commercial

Source: Citibank, September 2003

Parting Thought

But he that filches from me my good name/Robs me of that which not enriches him/And makes me poor indeed.

Shakespeare, Othello, act iii. Sc. 3.

“

Nashville, TN 37203