July 8, 2013

What Must a Business Do to Protect Customers from Identity Theft?

Don Hankins / Foter.com / CC BY
Despite growing awareness of the problem, identity theft continues to occur with increasing frequency and losses continue to rise.  For years, identity theft has been the most common complaint received by the Federal Trade Commission ("FTC").  The FTC recently reported that it received more than 400,000 complaints related to identity theft in 2012, including the misuse of personal information such as a social security, credit, or bank account number to commit fraud or theft. 
Clearly this is bad news for individual victims, but does your business have any legal obligation to combat identity theft?  The answer may be "yes." 

Under a smattering of state and federal statutes and regulations, businesses are increasingly being drafted by the government to fight in the war against identity theft. 

WRAL TechWire has recently published an article I wrote on this topic.  You can read more about identity theft and how businesses are required to address it here.  In the article, I cover the Federal Trade Commission's rules regarding the "red flags" of identity theft, address discrepancies, the North Carolina Identity Theft Protection Act, as well as California law.   The article also lays out the components of a suitable identity theft plan.

One of the best steps a company can take to protect itself prior to a problem arising is to create, adopt, and implement a well-conceived identity theft plan.  Not only will such a plan prevent potential identity theft, it may also help limit a company's losses in the event a problem does occur.  A business is well-advised to act promptly to protect its customers—and therefore itself—from the growing threat of identity theft.
(WRAL TechWire is an online news source for technology and business news and analysis for the Research Triangle Park and the Raleigh/Durham/Chapel Hill business and technology communities.  It is owned by Capitol Broadcasting Company, Inc., which operates the WRAL broadcast television station in the Triangle.)