identity theft

BY BOBBY COMMAND

WEST HAWAII TODAY

bcommand@westhawaiitoday.com

Warren Chong is trying to warn businesses that they’re at serious risk.

With filing cabinets and computers full of the personal information of employees and customers, owners and supervisors can be charged with civil and criminal offenses if any sensitive material falls into the wrong hands.

“Nobody understands this,” said Chong, who was recently certified as an identity theft risk management specialist. According to Chong, penalties for such negligence include prison terms as long as five years.

“Three to five years ago nobody cared about this,” said Chong. “But society reacts at a tipping point, like it did with smoking, sexual harassment and asbestos.”

Chong said a major misconception about identity theft is that it is limited to financial statements.

Indeed, a misplaced credit card number or bank statement could result in a time-consuming mess with personal finances.

“But it is so much deeper than that,” said Chong. “For instance, you have no idea what another state’s driver’s license looks like. What happens if I steal your identity and I get a speeding ticket? Eventually a warrant goes out for your arrest.”

Medical records, Chong said, could be used by those who don’t have insurance and are desperate for treatment or drugs. He said Joe Ryan, 60, of Colorado received a bill for $41,188 for surgery that he never received. It was eventually traced to a person whom had helped him with a credit card purchase.

When he went to the hospital to try to correct his medical records he was told he couldn’t have them because his signature did not match the ones in his records. While the hospital eventually absorbed the loss, the incident remained on his credit records and when he tried to refinance his business, he was hit with a high interest rate which eventually ruined his finances.

“This can also affect someone who is trying to get insurance,” said Chong, who said database managers like MIB Group may have bogus information that will prevent someone from being insured.

Chong said many businesses and individuals who maintain or process consumer information for a business purpose are being exposed to major risks and don’t even know it.

According to the Fair and Accurate Credit Transaction Act passed by Congress in 2003, employee or customer information lost under the wrong circumstances may result in federal and state fines of $2,500 per occurrence and civil liability of $1,000 per occurrence.

Businesses are also exposed to class-action lawsuits with no statutory limitation and are responsible for the actual losses of each individual, an average of $92,893.

Another example brought up by Chong includes the University of California at Los Angeles, which suffered the largest identity theft ever when its data base was compromised by a computer hacker which had access to the records of 800,000 people.

“This could theoretically bankrupt the school,” Chong said. “And there is no statutory limitation on the claims, so this will hang over the school for years.”

While that is at one end of the spectrum, Chong said there are cases where a wanted criminal had a case against a police department that published his Social Security number on his wanted poster.

Chong said that law as well as other consumer protection legislation are so new there is very little legal expertise in the United States. Yet.

According to CIO Magazine, Chong said, a company can expect to lose 20 percent of customers who are affected by a security breach. He added that 40 percent will consider an end to the relationship and 5 percent will be seeking legal redress.

“Lawyers are going to have a field day with this when they discover what this is all about,” said Chong, who works for Pre-Paid Legal Services, which recently began concentrating some of its efforts on identity theft protection.

Even aside from the legal liability, Chong said employees become less productive when they are trying to restore their identities, since most of the agencies necessary to contact are open only during regular business hours.

“I tell businesses to get protection now,” said Chong. “Don’t wait until it happens, because it could potentially ruin them.”

Contact Chong at 989-0501 for more information.