The Reality of ID Theft in The Digital Age

The general public simply does not understand how they are affected.

I hate how corporations constantly use fear as motivation to buy something or do something. But, as I am the President of FreedomID, I see the personal impacts of Identity Fraud, first hand. I also have a comprehensive understanding of the industry, marketing gimmicks, and actual risks. I follow corporate data breach news closely and read between the lines to understand how this issue affects the everyday American. This article will provide my forthright opinion that I believe all FreedomID members and non-members need to truly understand.

Data Breaches & ID Theft are big business and insanely profitable. Sticking your head in the sand can have serious consequences. Since 2012, there have been hundreds of millions (some say billions) compromised records in data breaches. A compromised record is a record that contains a person’s personally identifiable information. (PII). At this point the Identity Theft Resources Center estimates that one in three people have had their private information compromised.

Below are some key points you need to understand.

It’s Not IF – It’s WHEN

The numbers are astounding – an identity theft occurs once every 1.9 seconds. If you are like most middle class Americans, going to work, going grocery shopping, buying from Amazon, sending emails, active on social media, have a debit card, go see the doctor and file your taxes – then it is only a matter of time before your family is dealing with an identity theft situation. It could be just a simple credit card fraud case, or it could be as serious as a criminal case wrongly filed against you. Why? Because it’s highly likely that your information has already been stolen, and will be sold on the black market. The reality – it’s just a matter of time.

You CANNOT Prevent It

I hear ads on the radio & television saying they can prevent ID theft if you have this service or that monitoring. That is absolutely false. You can take every precaution recommended by every identity professional, you can sign up for super monitoring packages, you can shut down everything you do electronically and you still cannot prevent this crime. Here’s the truth, the #1 from of ID theft is taxes and government benefits. Close behind is medical ID theft. How exactly is any ID theft protection company going to stop this from happening to you? How is a monitoring dashboard going to stop a criminal from stealing your ID, building a fake driver’s license, test driving a car and never coming back – or walking into a bank and making a withdrawal in your name? Both are actual cases that occurred in the last 12 months by the way. So anyone who says they can prevent it from happening is falsely advertising.

Monitoring is fantastic – it can serve as a notification system that your ID is being used in certain circumstances – like a new loan or credit card is opened for example.; or that your information was sold on the black market (if you have cyber monitoring). But the notification is AFTER your information has already been compromised. It will not prevent your information from being illegally sold to begin with. Thus, it cannot prevent what happens next – it can only notify you that it did. The mess still has to be cleaned up and that is why the resolution/restoration services are so very important.

What You Don’t Know CAN Hurt You

Recently, Kansas Department of Commerce was breached. According to the AP News release on July 21st. 2017, there were 5.5 million Social Security numbers compromised, in nine states (AR, AZ, DE, ID, IL, AL, OK, ME, VT). The breach was discovered on March 12th, 2017.

Now the part everyone missed – the department was required by law to notify the victims – via email. But they only had 260,000 email addresses on file – so they notified a dismal 5% of the victims. It get’s better – they are providing ID Theft resolution services for victims (if you know you are a victim), if you call an 800 number before the end of July 2017. So to sum it up, 95% of the people whose information was compromised in this breach were not notified and the 5% that were notified can call a hotline before July 21st – if they are paying attention, and if the email didn’t go to junk or spam. So I guess the sunset on criminals using your information is just a couple months – because we put a time limit on them.

Breaches have doubled thus far in 2017 according to the ITRC, and it’s not getting any better. People’s private information is compromised in these breaches, then sold illegally to other criminals who want to profit from it. Most people don’t know they were a victim of a breach to begin with, much less taking action. There is no time horizon for you to become a victim – it could be a week, month, year or more – and you will have no earthly idea how, why, where or when your information was stolen in the first place. See #1.

It’s About Profit – Not You

ID Theft feels very personal and invasive when it happens to you. But, unlike many crimes – it really isn’t personal. You are just a number in a system and the number is worth money when stolen, sold and then used by another party.

Here is an example. A nurse working in a small doctor’s office became disgruntled and began selling medical records for $75 per record to a criminal broker who then resold these records to buyers willing to pay $1,000 for a legitimate record with good medical history and insurance. The buyer then had a procedure costing mega dollars. Of course the deductible was never paid, and was eventually turned into a collection agency – which promptly went after the actual person for payment. It took approximately $9,000 in legal fees to resolve this issue.

In a data breach the victimized company can be on the hook for significant expenses that may or may not be covered in their insurance policy. The company will use whatever means necessary to protect the COMPANY from financial liability resulting from the event such as services provided to victims, mailing costs, lawsuits etc. There are data breach regulatory laws in every state that companies must comply with. The state’s attorney general is looking out for the victims, and may require the company to provide notifications and/or ID theft services. But it is typically a negotiation requiring months of discussion and investigation depending upon the size. You should also know that six in 10 businesses fail within six months of a breach.

If you understand the previous paragraph, then you will understand why an estimated 80% of data breaches go unreported. I have spoken to countless business owners and C-Level officers about this subject. What became apparent is the need to protect the business first. The risk to the business profitability and viability was the focus – not you.

So – What Do I Do?

In conclusion, the digital world we take advantage of is a great thing. It is estimated the collective global knowledge is doubling every 13 months as a result. That is simply incredible and wonderful. The downside is your information is more easily compromised than say in 1985. I am asked all the time what they should do to prevent ID theft chaos. The answer is simple – purchase an ID Theft Management service that you can afford, with focus on resolution and reimbursement. You don’t have to spend $20 or $40 per month – you can get a solid policy that works for less that $6 per month for your entire family. Employers offer some great plans in benefit packages as well.

FreedomID offers LifeStages Family Identity Theft Protection for under $6 per month that includes $25,000 in expense reimbursement and fraudulent electronic withdrawals reimbursement. That’s about the price of a good burger from any fast food chain – but gives you and your household so much more. You can add monitoring packages as you see fit, but for far less than typical retail products. Use Promo Code Protect25 to get 25% off monthly plans here.

Mark Norman
Mark Norman