Lost Work Time = Lost Revenue
Feb 1, 2012
What are your employees legal and identity theft problems costing you and your company's bottom line?
Legal and identity theft services are now prized voluntary benefits. In the past four years, voluntary legal and identity theft plans have increased rapidly in worksites in the United States. Most, if not all, employees will eventually need the assistance of an attorney. Industry research has found conclusive evidence that legal issues cause workplace distraction, absenteeism and lost productivity.
LSK Associates surveyed both white and blue-collar work environments for trends in employee absenteeism. The findings were startling! Of the eleven employee-listed "time work lost categories," five now include legal and legal-related problems. Employees experience legal issues ranging from divorces, car accidents, credit troubles, home purchase, car repossessions, insurance cancellations, tax problems and personal bankruptcy.
LSK statistics confirmed that 48 percent of a company's employees will experience some business or personal legal-related issues throughout the year, and be away from their jobs at least 51 hours per year to solve them. This time spent away from work dealing with legal issues, ends up costing employers thousands of dollars in terms of overtime, absenteeism, higher insurance and compensation premium claims, administrative costs and lost employee production. Studies show employees with legal problems usually:
- Are absent five times more than average
- Use their medical benefits four times more than average
- Use their sick leave twice as often as the average employee
- Experience a substantial reduction in their productivity
The threat of identity theft is increasing. For the last eleven years, identity theft has been the number one complaint filed with the Federal Trade Commission(FTC). Though anyone can be the next victim of identity theft, victims are getting younger in increasingly alarming numbers. Child identity theft is the fastest-growing "form" of identity theft. Because credit checks don’t verify age, parents or relatives who steal a child’s identity can take out new loans, open credit cards, etc. The 18 – 29 age range reports one of the highest incidences of identity theft, though age doesn’t really matter because victims in general range from newborn infants to senior citizens. People in the 18 - 29 age range use the Internet frequently and put a great deal of their information on the internet without protection. In 2009, there were more than 11.1 million victims of identity theft and fraud. This is a new record number that illustrates both the volume and sophistication of online phishers and hackers, according to financial services researcher, Javelin Strategy and Research. Victims also lost $54 billion, which is a 12.5 percent increase. Last year, the number of new credit card accounts that were opened fraudulently shot up 39 percent, while new online accounts more than doubled. In addition, new e-mail payment accounts increased 12 percent. Nearly 3 in 10 victims said their data had been used to open cell phone accounts and at least 13 percent of all identity crimes from 2009 were committed by someone whom the victim had known.
In the past five years, about 500 million records containing personal information of U.S. residents stored in government and corporate servers were stolen or lost. Since little attention was given to database breaches before 2005, it's a pretty good bet that everyone has had their personal information hacked into multiple times. Many people have received multiple notices letting them know that their personal data has been lost or stolen. Consumers who receive a data breach notification letter are more than four times as likely to become identity theft victims versus those who don’t. Yet in still, many who are alerted fail to take action.
Legal and identity theft issues can have a devastating affect on an employee's credit rating, their reputation, emotional state and morale. Last but not least, it affects your company. Employees are not only sidetracked by the emotional stress, they say that the impact of identity theft is similar to a violent assault.
Employees are not the only victims— companies are victims as well. Should there be a data breach, CIO magazine has stated that about 20 percent of your clients will terminate their business relationship with you and your company, 40 percent will consider it and 5 percent will hire attorneys.
"When it comes to cleaning up the mess, companies on average spend 1,600 work hours per incident at a cost of $40,000 to $92,000 per victim," according to the magazine's 2006 statistics.
There are many reasons why the cost is high and a lot of time involved. Here's the start of a list of agencies and institutions that you may have to contact to resolve identity theft problems.
- The three credit bureaus: Transunion, Equifax and Experian
- FTC(Federal Trade Commission)
- Social Security Administration
- DMV(Department of Motor Vehicles)
- U.S Postal Service
- Credit card companies
- Banks and financial institutions
- Police / law enforcement departments
- Other applicable entities
A voluntary legal service and identity theft plan offers peace of mind that comes from knowing the employee has someone to turn to when they need them most. A voluntary legal service and identity theft plan can enhance productivity and personal well-being. The employee benefits industry is obligated to provide a diversified benefit portfolio to its existing and potential clients, which include "value-added" low cost benefits like legal and identity theft service plans. These plans can enhance productivity, personal well-being and it can help you recruit and retain good employees.
Tips for protecting your identity and credit
- There are valid reasons why you could be asked for your social security number: Your employer or financial institution may need it for tax and wage reasons (it's necessary whenever a credit check is required). Don't give your Social Security number, mother's maiden name or account numbers to strangers who contact you— especially by phone, mail or online. Your social security number is the single most important part of your personal information that thieves can use to steal your identity and ruin your credit.2.) Keep track of the dates your bills or credit card statements should arrive. If they don't arrive on time, call the creditor to make sure a thief hasn't changed your address.
- Protect your mail. Don't leave outgoing mail in your mailbox. Take it to the post office or set-up a P.O. Box. Remove mail after it has been delivered. If you're planning to be away from home, call the post office to request a vacation hold.
- Put passwords on your credit card and banking accounts. Try to avoid using information like your mother's name, your birth date, the last four digits of your social security number or your phone number.
- Don't carry your social security card with you. Leave it in a secure place at home. Give the number out only when necessary. Try to use other types of ID when possible. Don't carry credit cards you don't need. Many people carry multiple credit cards but only use one or two.
- Remove personal information from old computers. If you delete sensitive files by using your keyboard or mouse, the files could stay on your computer's hard drive where they can easily be retrieved. To make sure your files are unrecoverable, use a "wipe" utility program to overwrite the entire hard drive. If you keep business, medical, or personal financial information on disks, simply deleting it isn’t enough to protect the data when disposing of the equipment. Besides identity theft, data loss may leave you or your company liable under federal laws such as HIPAA, Sarbanes-Oxley, Graham-Leach-Bliley or other state laws. Criminal penalties include fines and prison terms up to 20 years, not to mention the civil suits that can result.
- Tear or shred charge receipts, copies of credit applications, insurance forms, physician statements, bank checks and statements, credit offers and any tax or bank documents that you throw away. Investing in a cross-cut paper shredder would be one of the best investments you can make. Cross-cut shredders provide more security by cutting paper vertically and horizontally into confetti-like pieces. The trade-off is these shredders may require more maintenance and generally cost more. With patience, someone could reconstruct any shredded document if you have a regular paper shredder. Cross-cut shredders just make the job of reconstructing documents much more difficult for thieves.
- Be careful online. Before making any purchases online, look for an "icon" of a "lock" in the lower right-hand corner of your browser window. If you see the "lock icon", then you're dealing with a secure website. Many websites look very professional, but may not be a safe place to leave your personal information.
- Don't put your trash out until the day that they pick it up. People that put their trash out on the street a day or two in advance are inviting anyone that walks down the street to rip open a few top bags just to see what's there.
- If you want to inspect your credit report, order a free copy from each of the three major consumer reporting agencies at www.annualcreditreport.com. Fight identity theft by monitoring and reviewing your credit report. You may request your free credit report online, phone or through the mail. Free credit reports requested online are viewable immediately upon authentication of identity. Free credit reports requested by phone or mail will be processed within 15 days of receiving your request.
To Request your Credit Report by Mail:
- Download the request form (You need an Adobe viewer to view the requested form.) Print and complete the form
- Mail the completed form to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
Your reports will be mailed to you within 15 days. Please, allow 2-3 weeks for delivery.
To Request your Credit Report by Phone:
- Call 1-877-322-8228
- You will go through a simple verification process over the phone.
Again, your reports will be mailed to you within 15 days. Please, allow 2-3 weeks for delivery.
Choose an identity theft program and legal service plan that work together, because identity theft is first and foremost a legal issue
Choose a comprehensive identity theft program with a legal service plan that complements it. Make sure that the identity theft provider you choose are experts in handing the seven types of identity theft that you might face one day: Synthetic, Driver's License, Social Security, Child, Medical, Criminal or Character and Financial Identity Theft. If someone's a victim of identity theft, they're going to need to get an attorney involved because identity theft is first and foremost a legal issue.
Approximately 60 to 70 percent of all identity theft issues require access to legal counsel. Most identity theft providers will send a kit in the mail when you become a victim of identity theft. Getting a kit in the mail means that you'll be making all the calls and doing all the footwork. The time it takes an individual to resolve an identity theft situation on their own is anywhere between 55 and 600 hours or more, and between $1200.00 and $5000.00 in out-of-pocket expenses to resolve. Look for a company that is a true leader in the risk consulting industry with licensed, experienced professionals and a proven identity theft product. There is no way to stop identity theft, but you can minimize your risk. The way to minimize your risk is by choosing an identity theft plan that offers 24/7 credit monitoring and a plan that provides restoration services should your identity be stolen.
About The Author
Andre' Andropolis is an independent associate with LegalShield(SM), and operates his business from Milwaukee, Wisconsin. Andre's focus is on offering LegalShield and the Identity Theft Shield to individuals and families. LegalShield can also be offered to companies as a voluntary employee benefit. For more information, please contact Andre' or one of his associates at 877-400-6693 or visit his website at: andrej.legalshield.com
- LSK Associates Study
- Javelin Strategy & Research
- Legal Needs & Civil Justice - A Survey of Americans
- Get Smart about IDT - Steffen W. Schmidt & Michael McCoy(Smart Solutions Magazine)
- CIO Magazine