Rallying 'Round the Red Flags

New identity-theft regulations apply to many kinds of companies, and some don't know that.

Carol E. Curtis, CFO Magazine
March 1, 2011

Identity Theft Wreaks Havoc on Businesses

What the financial institutions recognize, but much of American business hasn't yet, is that it's not just the victim of stolen personal information that suffers the high cost of identity theft. Once fraud is determined to have occurred, the business defrauded is left holding the bag, and that loss gets passed on to consumers in the form of higher prices. Unfortunately, the national debate around the red flags rule was successfully hijacked by the professional classes who are resistant to change, despite the obvious cost to their industries. In a survey published Nov. 3 by the Healthcare Information and Management Systems Society, a third of information technology professionals at hospitals and medical groups reported that their organization had had at least one known case of medical identity theft. Another study earlier this year from the Ponemon Institute showed 1.4 million Americans have been the victim of medical identity theft. And its associated costs are significantly higher than other forms of information fraud, amounting to about $20,000 to resolve each case. Just as in healthcare, prevention is the best medicine against identity theft. The red flags rule represented a major opportunity to educate and arm professionals and small businesses against identity thieves. Instead, they'll get to discover the havoc identity theft wreaks on businesses and clients the hard way. Eduard Goodman is the chief privacy officer of Identity Theft 911, an identity management and data risk management provider and consumer education service. In 2008-2009, he chaired the State Bar of Arizona?s Internet, E-Commerce & Technology Law Practice Section. He is a certified information privacy professional and has studied comparative privacy law at the International Court of Justice in The Hague. Goodman also is a member of the International Association of Privacy Professionals and the International Association of Financial Crimes Investigators.

Posted by Eduard Goodman | March 01, 2011 05:32 pm