A few years ago, Discover ran a humorous TV commercial about its fraud protection service in which a customer is seeking “frog” protection. We had a good chuckle regarding the miscommunication between the service rep and customer—played by similar-looking actors—and how by the end, while one was saying “fraud” and the other “frog,” they agreed that they were on the same page. In reality, however, identity theft and fraud are no laughing matter. Just recently, a friend of mine from high school discovered that a fraudulent social media page was using her photographs, including images of her family members; the site has since been removed. Identity theft and fraud are on the rise, and this presents an opportunity to offer protection benefits for your employees and coverage for your clients.
On the Rise
After committing identity theft, the thief can use the information for illicit financial gain—identity fraud. According to Javelin Strategy & Research’s 2018 Identity Fraud Study, in 2017, the number of identity fraud victims in the United States increased 8% from the previous year, rising to 16.7 million consumers who lost a total of $16.8 billion. Online shopping sees the most offenses, as “card not present” fraud is now 81% more prevalent than “point-of-sale” fraud. The report also notes that “fraudsters are getting more sophisticated in their attacks, using stealthier and more complex schemes.”
“Identity thieves are becoming more sophisticated in both their strategies and technologies; they are more skilled in the nuances of how best to steal personal data without getting caught,” says John Thornton, executive vice president of Amalgamated Life Insurance Company. “They understand the vulnerabilities in today’s computers, mobile devices and other connected technologies and have developed techniques for capturing personal data.
“ID thieves are now starting to steal only parts of an individual’s identity rather than all of their personal information,” he continues. “This makes it more difficult for an individual to detect the fraud and also for the crime to be prosecuted. Despite our attention to online ID theft, the Federal Trade Commission reported that a lot of ID theft occurs using hard copy printed materials or mail, which the FTC notes is involved in 53% of all ID thefts.
“Another trend relates to our extensively connected lives,” Thornton adds. “Besides our mobile phones, iPads and other devices, many households now have smart TVs and use Alexa or Siri to get information quickly. Many luxury cars are equipped for Internet connection and Wi-Fi. These technologies all increase our vulnerability to ID theft. To capitalize on these vulnerabilities, the most sophisticated hackers and identity thieves are now investing in what are called ‘Exploit Kits’ that encompass code that makes it easy to steal personal information.”
ID Theft Protection
After my friend discovered the fraudulent social media page, she couldn’t sleep a wink. Now imagine how your employees would act if the same thing happened to them, let alone if they had their bank accounts drained. With the worrying and distractions from their work, you can bet that productivity will suffer. This is where employers can help.
“Many employers are now seeing ID theft protection and credit monitoring solutions as a valuable voluntary benefit for their employees,” says Thornton. “The IdentityForce Progressive Benefits Survey reported that 67% of HR professionals are looking into identity theft coverage as an employee perk. A BenefitsPRO survey found that 83% of employees said they would enroll in a voluntary ID theft and credit monitoring benefit. Other ancillary solutions being offered include social media monitoring and new loan application monitoring.
“Many employers are offering or considering a voluntary benefit that encompasses identity management, credit monitoring and alert tools,” he continues. “These products offer robust identity management that includes giving employees access to fraud specialists on a 24/7 basis, along with options for credit monitoring and other risk management services including data breach and theft resolution support services. Additional offerings are available for full coverage of credit and non-credit information used in fraud, such as public and private databases, social media channels and the Internet’s black market.
“Many employers will invite companies that provide ID theft solutions to their worksites to present their ID theft and credit monitoring solutions,” Thornton says. “Specialists are on hand to answer questions and provide consumer-friendly literature that explains how these tools work and the scope of the protection and risk mitigation they provide. They also post product information on their websites for easy access.”
For agents and brokers whose clients may be alarmed about identity theft, they “should remain aware of what’s happening in ID theft and share their knowledge with their clients,” Thornton says. “They should be encouraging their clients’ IT departments to be diligent in their deployment of best practices in system security and advise them to advocate for employees’ adherence to best practices pertaining to system security both in the workplace and at home and for all of their connected devices.
“There is now heightened awareness regarding the importance of protecting one’s personal information and following safe online practices, such as changing your password, keeping your security software up to date, and avoiding unsecure websites. There are also many more players in the ID theft and credit monitoring world that are offering a wide range of solutions that weren’t available five years ago. Going forward, you can expect more choices in ID theft and credit monitoring products and more sophisticated solutions being deployed at points of sale in retail operations where a large percentage of ID thefts occur,” Thornton concludes.
Article By: Christopher W. Cook
Source: Rough Notes