Hispanic Enterprise - October/November 2007 - (Page 54)

MANAGING IDENTITY THEFT AS A BUSINESS LIABILITY ARE YOU PROTECTING YOUR CUSTOMERS? By Jorge Rey he 15 million Americans who fell victim to identity theft last year are painfully aware of how upsetting it can be. With an increase of more than 50 percent in identity theft in between 2003 and 2006, it is one of the fastest growing crimes in America today. Business owners may be contributing to this epidemic, and newly enacted as well as upcoming laws may hold them responsible. With the volume of electronic transactions increasing dramatically, it is almost impossible to be in business and not collect or hold some personal identifying information. This includes names and addresses, Social Security numbers, credit card numbers or other account numbers from customers, employees, business partners, students or patients. Unfortunately, the risk that your stash of personal identiﬁable information might be breached puts your customers at risk of identity theft. 54 T Victims of identity theft can spend thousand of dollars and months—or years—cleaning up the mess thieves make of their good names and credit records. In the meantime, they may lose job opportunities, be refused loans for education, housing or cars, and even get arrested for crimes they didn’t commit, according to the Federal Trade Commission. To encourage businesses to address these risks, several federal and state laws have been enacted, and new laws are currently being considered. Penalties range from ﬁnes of $100 per violation to loss of federal funding. Federal laws include: • The Health Insurance Portability and Accountability Act of 1996 (HIPAA), which protects the privacy of health-related information. • The Financial Modernization Act of 1999, also known as the Gramm-LeachBliley Act or GLB Act, which governs ﬁnancial institutions. • The Fair Credit Reporting Act, which covers consumer reporting agencies. • The Children’s Privacy and Protection Act of 1998 (COPPA), which regulates operators of websites collecting children’s information. • The Family Educational Rights and Privacy Act (FERPA), which regulates educational information collected by institutions that receive federal education funding. Outside of regulatory compliance, it is a good business decision to protect personal identiﬁable information. A recent study found that information privacy and security breaches can cost companies an average of $182 per compromised record, a 31 percent increase from 2005. This might not sound like a big expense; however, when you consider the thousands or hundreds of thousands of records a business might hold, it can add up to a substantial total. Typical costs to recover from a data breach range from $226,000 to $22 million. This cost does not include damage to the organization’s brand and October/November 2007 HISPANIC ENTERPRISE

Table of Contents Feed for the Digital Edition of Hispanic Enterprise - October/November 2007

Hispanic Enterprise - October/November 2007 Contents BIZBUZZ: Business Briefs Trendsetters BIZTECH: Personally Digital BizLife - Travel: The Mobile Meeting Motoring: Is What You Drive, Who You Are? Q&A - Fact Tank for the Hispanic Population Hispanic Commerce Cover Story: Tiles with Style Success & Motivation: Grammy Whammy Finance: Talking Code Event: Masterminds NCLR Report - Improving your Triple Bottom Line Politics & Government: Keep on Truckin' Managing: Avoiding an Identity Crisis Franchising: Beyond the Brand Finance & Investing - Talking Money Movers & Shakers Regional Report - Louisiana, Louisiana Chamber Focus - On the Island of Enchantment

Hispanic Enterprise - October/November 2007

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