Why Does FACTA Matter to Me?

FACTA stands for Fair and Accurate Credit Transaction Act. FACTA is the law which allows any American access to their credit report once per year. The law went into effect Jan. 1, 2005. So what does that mean for you as an employer?

On June 1, 2005, a new provision of FACTA goes into effect. It says that any employer (even if you only employ one person, and you have their personal information so that you can pay social security taxes,) whose action or inaction results in the loss of employee information, can be fined by federal and state government, and sued in civil court.

A USA Today article on FACTA from Jan. 14. 2005, stated "Bet you didn't know that." But you need to know, and need to know what you can do to protect yourself.

Small Businesses affected the most

'"A small businessman who makes a mistake could bear the brunt of a regulation like this," says James Plummer, policy analyst at Consumer Alert, a non-profit group that focuses on a free-market approach to consumer regulations.'

The USA Today article goes on to say that "if you don't shred and information gets out, there are penalties." But what if you do shred all potential employee information, and take all necessary precautions to protect your past, current, and future employees' identities, and the information still gets out somehow? Under FACTA, you could still be held responsible.

You may not think information theft could happen to you, but neither did this short list of companies, universities, government institutions, and businesses that have had employee or customer information stolen from them:

DSW Shoe Warehouse

Lexis Nexis

University of Northern Colorado

California State University (Chico)

University of California ? Berkeley

University of Maryland

Las Vegas Department of Motor Vehicles

Bank of America

Choice Point

Weld County (CO) Employees (information stolen by an inmate while in jail)

How can you, as an employer, minimize your liability?

There are hundreds of things you can do to minimize liability, which are probably things you already do. Document shredding, redaction of electronically stored information, careful screening of employees who will be coming into contact with personal information of customers and employees, physically locking file drawers with sensitive information, and setting up firewalls on computer equipment connected to the Internet, among hundreds of other solutions, are all good ideas.

The old saying that an ounce of prevention is worth a pound of cure is definitely the case when it comes to securing personal information. However, no matter what prevention steps you take, there is no 100% effective way to be sure that employee's information won't be compromised. Even if the information doesn't get out from your company, an employee can claim that it did.

That's a scary thought! What if an employee claims that their information was stolen through the actions of your company, but there's no real proof to back it up? You will end up hiring (or using) an attorney to represent and defend your company in court. At $150 - $200/hour for most attorneys across the United States, how long can you afford to defend your company?

So what can you do?

The only sure solution, or at least the only solution that would at least provide an affirmative defense against the fines, fees, and lawsuits you could incur as an employer, is to offer some sort of Identity Theft protection as a benefit to your employees.

As an employer, you can choose whether or not to pay for this added benefit. However, the most important thing you can do is to make the protection available, and have a mandatory employee meeting, similar to what you probably already do for health insurance, to help employees understand Identity Theft and the protection that you are making available to them. When you make the protection available, and when your employees have been educated on the dangers of Identity Theft, they can either elect to have identity theft coverage as a benefit, or they can decline the coverage as a benefit.

If the employee has Identity Theft coverage and becomes a victim, it is beneficial to your business, because an employee with Identity Theft coverage will spend less time, less money, and will experience less frustration while trying to have their information restored. This will get them back on the job and focused on work more quickly.

If the employee declines the coverage, and later claims that the information was stolen as a result of you or your company's actions, you have a piece of paper, with their signature, saying that they attended the presentation and declined the coverage.

Choosing to not make Identity Theft coverage available leaves you exposed to an unlimited dollar amount that you can be sued for under civil liability, federal fines of up to $2,500.00 per employee per incident, and state fines of up to $1,000.00 per employee per incident.

Recommended course of action? Have a benefits consultant who offers an Identity Theft protection plan present to your employees. Help them set up a 20 minute presentation with your employees, and make it mandatory that all employees attend. You want your employees to be protected from this awful crime. If they choose not to be, but you've given the option of being protected, then the liability becomes theirs, not yours, when they become a victim of identity theft.

Jonathan Kraft is a benefits consultant who specializes in educating people about how they can get affordable access to the legal system. Because of his work in the field of electronic Identity Theft, he has come to be known as Colorado's Foremost Expert on Computer Related Identity Theft. To schedule a time for Mr. Kraft to present Identity Theft and Legal Service protection to your employees, please contact him at (877) 825-7119. You can also find out more on the web at http://www.strive4impact.com/group

---

Identity Theft - How to Protect Yourself

"Like the tan? I got tons of sun on that... Read More

Beginners Guide to Credit

I remember back when I was 18 and completely oblivious... Read More

Credit Report ? Check Yours Regularly - and for Free

In the twenty-first century, there are few documents that have... Read More

How to Deal with Hire Purchase Debt

WHAT IS HIRE PURCHASE/CONDITIONAL SALE?Although people often talk about "buying... Read More

Your Credit Score

Credit scores: all lenders use credit scores to determine interest... Read More

Stop Struggling Because Of Poor Credit And Improve Credit Rating Now

Did you apply for a personal loan only to be... Read More

Free Credit Report - Really

2005 marks the year that consumers will be able to... Read More

Your Credit Card May Be Costing More Than You Think!

Do you know what your credit card is truly costing... Read More

5 Killer Steps to avoid Credit Card SCAMS!

In August, 2004, the Federal Trade Commission issued their findings... Read More

Bailiffs & Council Tax - Knowing What To Do

This article is about bailiffs who may call trying to... Read More

How To Eliminate Credit Card Debt

There is almost nothing more troublesome than having too much... Read More

How You Can Help Prevent Identity Theft

How can I prevent Identity theft from happening to me?... Read More

4 Steps to Creating Good Credit

As a consumer you've learned the importance of establishing a... Read More

How To Survive In A Plastic World, Qualifying For Credit Card

Let's face it, having credit is no longer a choice.... Read More

10 Ways of Reducing the Risk of Identity Theft

1- Check your credit report regularly2- Secure personal information in... Read More

Credit Card Tips

Here are some useful credit card tips for you to... Read More

Online, Phone, U.S. Mail or In-Person: Where is Your Credit Card and Personal Identify Safest?

Identity theft is the fastest growing crime according to the... Read More

Credit Report Hassles

There is no end to the amount of pain that... Read More

Why Americans Find Predatory Lending Offensive

"Menis - the author translates as "indignant rage" - It... Read More

Credit Score: The Brightest Feather In Your Financial Cap

Credit scores are the most important aspect that determines your... Read More

Repair Your Credit - The Right Way!

How to Repair a Bad Credit Rating?The Right Way!If you... Read More

What You Should Know About Credit Counseling

Credit counseling is a free service that many people with... Read More

Why Does Your Credit Card Rate Keep Going Up?

Have your read your credit card contract through completely? Do... Read More

Credit Cards - Why Prepay?

With prepaid credit cards, you get the practicality of plastic... Read More

Credit Cards -- What You Should Know

There are a lot of questions about using credit cards.... Read More

What Happens When Your Credit Is Damaged? Do You Have Recourse?

The good thing about bad credit is that you can... Read More

It Is In Your Best Interest To Do The Math On Your Credit Card Interest

If you begin foaming at the mouth once a month... Read More

19,178 Identity Theft Victims Per Day - Are You One Of Them?

Identity theft statistics are shocking. And we are told that... Read More

Credit Card Expenses Are Killing Your Budget!

Do you know the costs associated with your credit card?... Read More

How You Can Avoid Becoming A Victim Of Identity Theft

To reduce or minimize the risk of becoming a victim... Read More

Teaching Students To Keep Out Of Credit Card Debt - The Parents Role

Parents have the full responsibility for their children and their... Read More

Credit Suicide

Few things influence the home buying process more than your... Read More

Have You Checked Your Permanent Record Lately?

As a young student I feared getting bad grades because... Read More