Delaware Employment Law Blog

Identity theft refers to all types of crime in which someone wrongfully obtains and uses another person's personal data in some way that involves
fraud or deception, typically for economic gain.  Identity theft is a serious crime, the effects of which can take years to correct, not to mention the enormous amounts of time and the overall inconvenience that are required. 

Identity theft is a serious enough topic that there is good reason to write about it any time of year.  But right now, there are more reasons than ever.  First, there's the current state of the economy.  In difficult economic times, theft traditionally increases as people become more desperate in the search for resources.  Second, it's the holiday season, when the need for extra money increases, right along with depression rates and anxiety levels. Third, internet shopping continues to be a popular alternative to the stressful hustle and bustle of the mall.  Add these factors together and it's difficult to imagine identity theft rates slowing down significantly any time soon. 

Just last week, a coworker mentioned that she had recently had her credit card number "skimmed" at a gas station.  She didn't realize the theft had occurred, though, until Monday morning when she checked her online bank account and was stunned to see that the account was substantially overdrawn!  Another coworker said that she too had been subject to a similar fraud, though the credit card company had not been able to determine exactly how it had occurred. 

I experienced the same type of theft recently when my credit card number was used to make thousands of dollars in online purchases over the course of a few hours.  The number of purchases triggered my bank's security alerts and I was called to confirm the purchases.  Thankfully, the bank's quick efforts prevented any damage from being done.  But this conversation between three coworkers shows how surprisingly common identity theft really is. 

When it comes to protecting your personal information, awareness is key.  Below is a short summary of some of the basics about identity theft.  Employers should keep themselves and their employees in the loop by circulating this type of information during the holiday season.

How Does the Thief Get the Identity Information?

• Steals credit cards, wallets, or purses.
• Steals mail to obtain checks and credit-card numbers.
• Rummaging through trash to find documents containing personal identifying information.
• Completes a change-of-address form on behalf of the victim, thereby diverting the individual's mail.
• Use personal-identifying information obtained on the internet.
• Theft of business records either by stealing records or files or by bribing an employee to do the same.
• E-mail "phishing"-- a scam where the thief pretends to a bank or the government.
• Obtaining a copy of the victim's credit report by posing as a landlord or other person who would have a lawful right to the information.

What Does the Thief Do With the Identify Information?

• Go on spending sprees using your credit card
• Open new credit card accounts
• Open new checking accounts using your name,date of birth and social security number to write
  bad checks
• Change the address on your credit card accounts
• Take out auto loans in your name
• Rent a home in your name
• File for government benefits using your name (unemployment insurance)
• Give your name to police during an arrest
• Establish phone and wireless service in your name
• Declare bankruptcy in your name to avoid paying debts or eviction

Some of the national resources available to learn more about preventing, reporting, and correcting identity theft include the Identity Theft Resource Center, the Federal Trade Commission, and the U.S. Department of Justice. 

In Delaware, the Office of the State Bank Commission has developed several helpful outreach and education programs.  And, for additional information specific to employers trying to assist employees who've been subject to a data security breach, see What to Do If Your Employees' Private Data Is Stolen.

Employers, do you know what to do if your employees' confidential data is stolen or lost? There are ways employers can prepare to act quickly and effectively in the event of a data security breach. Delaware employers in particular have a wealth of resources made available by the State. But don't wait until it's too late to learn about the necessary steps to take to help your employees in a time of crisis as well as to protect against liability. 

Notify Your Employees Immediately

Once you learn that there has been a potential data breach, you should notify every potentially affected employee.  Do so immediately.  Every minute counts when this confidential information has been obtained by someone with the wrong intentions.

Exactly how you give notice may differ based on the state where your business is located.  Delaware employers are guided by a state law, the Delaware Credit and Identity Theft Protection Act.  The Act instructs employers to provide written notice to employees that the security of their data may have been breached.  The Act also contains sample language for the notice.  In essence, the Act explains that employees should consider placing a "security freeze" on their credit report.

A security freeze is a permanent hold on your credit information. It costs nothing to have the security freeze put in place and it takes no more than three days from the time of the request. 

If someone wants to use your credit to get a loan, extend a line of credit, or finance a big purchase, the lender will need to contact a credit reporting agency to determine your credit rating.  If a freeze is in place, no information will be provided.  But you will be alerted and can, in turn, alert the authorities. 

And unlike a fraud alert, a security freeze will stay in place until you ask to have it removed permanently or lifted temporarily.

Monitor Your Credit Report

Another important step to take is to request a copy of your credit report and continue to do so periodically and cautiously monitor it for any inaccuracies.  By law, Delaware residents are entitled to one free credit per year from each of the three credit agencies.  The website that has been created for this purpose is www.annualcreditreport.com.  Or you can download the free credit request form (pdf) and mail the completed copy to:  Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA   30348-5281.

There is no penalty for Delaware residents who request their credit report or who put a security freeze on their credit.

Delaware Employers Should Utilize the Resources Offered by the State

Employers should know that the State of Delaware also offers several helpful resources.  It's a great idea to order some of these now to have on hand in the event that a theft does occur.  The new brochure, "Identity Theft Hurts"  has answers to many of the questions residents have about credit reports including what is in your credit report and what to do if you find an error in your credit report. The brochure also covers the issue of identity theft and steps you must take if you are a victim of identity theft.

The Office of the State Bank Commissioner also distributes a new brochure from the Federal Trade Commission entitled Stop Think and Click (also available as Stop Think and Click in Spanish), which highlights seven practices for safe computing.  The brochure also focuses on a new web site called onguardonline.gov, which provides practical tips from the federal government and the technology industry to help you be on guard against internet fraud.  The Office of the State Bank Commissioner recently released links to the top five web sites consumers can use to fight identity theft. 

The Office is partnering with the Delaware Money School and has scheduled over a dozen meetings in the spring of 2006 across the state on identity theft and free credit reports. Residents can register on line or call the money school for information about how to set up a presentation in your neighborhood or school.