Customer Information: Protecting the Organization’s Most Critical Asset from Misappropriation and Identity Theft

Identity theft is on the rise, evidenced by the increased complaints of such incidences reported to the Federal Trade Commission in 2004. One estimate is that 10 million customers are victims of identity theft each year. In fact, it is difficult to avoid news on public disclosure of security breaches to corporate databases that companies made in 2005. A typical example was the backup computer tape containing personal data for 3.9 million customers that was lost by the world’s largest financial services company in transit by courier to a credit reporting bureau. Consumers are clearly alarmed and some are switching banks or changing their online behavior in order to protect their identity. As a result, there is increased pressure on organizations to improve data security and therefore provide customers with some assurance that their personal information will not be misappropriated.This paper discusses identity theft and the risk to consumers as well as current efforts by federal and state governments to protect the privacy of their constituents. It offers steps that could be taken by organizations to protect their most critical asset - customer information — against identity theft.