Employers are starting to hear about this new law called FACTA, and are starting to be aware that they need to do something. But what should they do?What FACTA means is that if you, as an individual, lose
information on anyone you have ever hired; or, for any business in United States of America that collects any personal information on people, if information should be lost due to not destroying information properly, then two things can happen. First, there are federal fines of up to $2,500.00, and state fines up to $1,000, per employee, per incident. Second, business is liable for any damages individual suffers as result of a breach of information.
Take an example that company loses information due to negligent destruction (i.e. you don’t own a shredder and throw information into dumpster). Nothing in FACTA really determines what employee has to do to prove “negligent destruction” on part of employer, so an employee could simply state that employer had lost information, and even if employer had burned information into ashes, it would be up to employer to show that information had not gotten out due to his or her company’s negligence.
Business Week says that average damages for Identity Theft victims are $92,000.00 and up per person. Using this statistic, if you have 10 employees lose their identities, then on average, your liability is $920,000.00. Statistically, you are responsible for an average of 75 bad checks and 8 credit cards per employee. The average Identity Theft victim also spends 600 hours getting their credit restored, which means that you will have 600 hours per employee, so potentially 6,000 hours for 10 employees, which you will be responsible for paying employees who aren’t even at work, because they have taken time off to deal with Identity Theft.
According to John Gardner, co-author of Chicken Soup for Entrepreneurial Soul, “The damages are devastating to any business.”
There are many problems related to people’s identities that don’t deal with credit issues. Contrary to popular belief, only 26% of identity theft issues relate to credit issues. The other 74% of issues, according to Gardner, are related to following four areas:
Someone stealing your DMV record. Example: An identity thief wants to drive under your employee’s name instead of theirs. This will help Identity Thief to not get caught in cases of DUI, unpaid speeding tickets, etc. Your employee is then blamed for their driving record.
Someone stealing your MIB record. This is your Medical Information Bureau Record. Example: An Identity Thief wants to have an AIDS test done in your employee’s name, rather than theirs, or have their prescriptions filled using your employee’s Medicaid or Medicare benefits
Someone stealing your character identity to commit a crime in your name. Imagine this – your future employee comes to your child care facility, and everything sounds good about this candidate. However, you run a criminal background check, and find out that they have three arrests for child pornography and one for drug trafficking to minors. You bring record to their attention, and they insist it’s not them.
