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Identity Theft
By now, conducting financial and business transactions on line on 'secure' sites has become a commonplace convenience. But, as we are reminded from time to time, it is not entirely safe to entrust confidential personal information to others. Just such a reminder occurred in late May 2006, when the U.S. Department of Veterans Affairs disclosed that the confidential personal information of about 26.5 million people, including their Social Security numbers, had been stolen when a Virginia analyst took data home and his home was burglarized. According to the Privacy Rights Clearinghouse, a non-profit organization, the theft brought the number of identities compromised since 2005 to over 80 million. Indeed, according to a Wall Street Journal article prompted by the VA incident, identity theft has become such a concern for employers, both in terms of potential liability and lost productivity, that some are providing a new employee benefit: 'identity theft resolution services,' ie, someone to deal with the employees' legal and credit problems when a theft occurs.
What are the legal liabilities a company faces when someone ' an employee or outsider ' breaches the company's security and accesses employee or customer confidential information? More than half the states have legislation addressing this problem. This article focuses on federal statutes that expose companies to potential civil and criminal liability for failing to take adequate steps to prevent the theft.
The Federal Trade Commission Act
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