Identity theft has only become a crime since 1998, with the passage of the Identity Theft and Assumption Deterrence Act. According to the Federal Trade Commission (FTC) identity theft is one of the top consumer fraud complaints it receives now. Read the facts and follow the link --- just remember to come back.

Approximately 85,000 complaints of identity theft were received by the FTC's Identity Theft Data Clearinghouse in 2001, and that amount may double in 2002.

The Identity Theft Data Clearinghouse is a part of Consumer Sentinel, an online tool and fraud complaint database that is used by hundreds of civil and criminal law enforcement agencies, both in the United States and abroad.

The interesting thing about these figures is that the main source of identity fraud is theft of employers records. (According to the September 2002 report by TransUnion, one of the nation's three credit bureaus).

Among the reasons that HR departments are such a big target for identity theft is because thieves can acquire more information, names, and numbers when stealing personnel files than they can by getting someone's wallet or credit card for example. And often times it may even be easier to do.

Identity theft is a big problem for both the employee and the employer, even if it doesn't directly involve any wrongdoing or oversight by the employer. It can drain the personal life as well as the productivity and morale of an employee in their work life while they deal with the stresses caused by dealing with this problem.

According to a joint study by the PRC (Privacy Rights Clearinghouse) and the California Public Interest Research Group on average, victims of identity theft and fraud spend 175 hours researching and tracking the crime, 23 months of correcting credit reports, and $800 in out-of-pocket expenses to restore their financial standing.

* Employer Liability

The issue of employer liability in identity theft revolves around a legal standard of "reasonable care". Here is an example.

Two personnel files are stolen. One had been left in the open, the other was stored in a locked file cabinet. The file being left in the open could show neglect, while the file locked in the file cabinet probably would not. "Reasonable care" could be shown in securing the file, neglect in leaving the file vulnerable to theft.

Legal observers and other experts predict that the scope of liability will only grow. These legal problems and issues are relatively new now, and many are just testing the waters of employer liability at this point.

The source of the problem of employer liability is in striking the right balance between meeting the employees privacy and security needs, while at the same time managing the information and data that the typical HR department needs to fulfil its job.

* What can an employer do?

One important step that employers should do to help prevent identity theft is to be careful with and carefully guard the employees SSN.

Experts warn us to not use SSN's as employee identifiers, or on insurance cards, claims forms, paycheck stubs, timecards or timesheets. SSN's should not be used on any other things relating to an employee, such as parking permits, staff badges, training program rosters, lists of who got promoted, monthly account statements or client reports. Instead, alternate, randomly assigned numbers should be used, and sensitive information should be encrypted while being moved around electronically.

While there are many other actions that employers must take to prevent identity theft, the importance of an employees SSN is one of the main keys. It is a pivotal element in any identity theft case.

If you need help in setting up or reviewing your policies in preventing or responding to cases of identity theft, please contact Braun Consulting Group by just sending us a message using our contact us form.

The U.S. Social Security Administration (SSA) has a new policy regarding mismatched SSN numbers on employee records. The employer of every mismatch found will receive a "mismatch letter" stating that the number on file for one of its employees doesn't match his or her number on file with the SSA.

This information about mismatched numbers often seemingly implies that the person in question may be an illegal alien, has assumed someone else's identity to get the job, or is involved in any other number illegal and nefarious plots.

However, other simpler reasons may have caused the mismatch. Alternate reasons for the mismatch may be an unreported name change, a change in marital status, a stolen identity, a clerical error on your company's part while processing the employees paperwork, or even an error at the SSA.

If one of these "mismatch" letters is received from the SSA employers must be careful not to jump to conclusions. An inappropriate response (such as firing an employee for lying on their employment forms) can compound the problem. It may turn out to be a simple clerical error instead. You will then likely have a law suit on your hands as a new problem spawned from the original problem.

A careful check of records and uncovering of the cause of the problem is what is necessary. The employer should take the appropriate action to ensure compliance with the SSA, the INS (Immigration and Naturalization Service), and the IRS (Internal Revenue Service).

What may seem to be a simple error in filling out new-hire information or updating an employees records can trigger a whole series of events long after the initial oversight or mistake.

Paying strict attention to every aspect of any process that involves an employees SSN can go a long way towards protecting both the employee and employer from unexpected and costly consequences.

Remember, anything to do with an employees SSN is something that should be checked and double checked... and kept carefully guarded against theft or misuse.

If you have any problems or questions relating to mismatched SSN's or identity theft, just give us a call at Braun Consulting Group. We can help you follow the proper procedure to respond appropriately and handle the situation with the sure guidance of our experienced staff. Send a message using the contact us form.