While consumers are fighting their own personal wars with identity theft, companies are also inventing new ways to deal with the increasing threat. Banks lose millions of dollars every year by having to compensate identity theft victims, and so they’re developing new ways for consumers to protect themselves.
Companies that have a single reported security breach may find themselves with billions of dollars in damages, as well as a troubled reputation that will linger for years to come. USA Today reports that businesses lose between $150-$250 for each card number stolen from their files. This amount represents the required legal fees, consultants and administrative costs. This may not seem like a lot, but tens of thousands of credit card numbers can be stolen in a single breach.
Companies aren’t the only ones dealing with the challenge of identity theft. The government has also been affected. The state of South Carolina had its security system breached in 2012, resulting in 3.6 million Social Security numbers being exposed, thestate.com reports. And in a 2006 security breach at the U.S. Veterans Affairs Department, the personal data of 26.5 million veterans was downloaded to a laptop that was later stolen (and later, recovered).
Once information is accessed by a hacker, it can be uploaded online. At this point, nothing can stop the information from being traded on the Internet, and those who have been affected may have no choice but to petition for a change of their Social Security number. This is not an easy process and can sometimes take months. Government agencies are especially vulnerable to security attack, because so many of them run legacy computer systems.
Retail establishments are at increased risk for identity theft, because they rely on third-party vendors and merchant payment processes for many of their services. Consumers are more likely to experience identity theft during the holidays, in part due to new and seasonal workers employed at retail locations. This means retail stores need to be cautious about running background checks on their new workers.
While banks, governments and corporations are working hard to lessen the impact of identity theft, the bulk of the responsibility still falls upon the consumer.
- Avoid using paper statements, and thoroughly review your statements every time you get one
- Consider signing up with an identity theft protection service such as LifeLock. These companies will monitor your account activity and alert you if they see anything suspicious
- Never release your credit card information online until you have verified the recipient
- Teach your children about Internet safety
- Don’t leave your mail in your mailbox overnight, and always shred documents before discarding them
Have you ever been a victim of identity theft? How did it affect you? Share your thoughts in the comments.