The Employee 'Benefit' You Have No Business Paying For
What's America's fastest-growing crime? If you answered, "identity theft," you've been victimized by one of America's biggest cons. That is, that identity theft is a fast-growing, serious crime.
Don't buy it -- and definitely don't buy into the increasing number of pitches you're probably receiving recommending that you should include identity theft protection as an employee benefit.
Identity theft is "one of the nation's fastest growing crimes," according to a Sept. 27, 2010, press release from Lifelock, a Tempe, Arizona, seller of services for detecting and preventing identity theft. If you're like The Debunker, you've heard similar claims about identity theft for years. Back in 2008, Lifelock's official corporate blog went further, stating flatly, "Identity theft is the fastest growing crime in America" [italics are mine].
Hold it. According to the Federal Trade Commission's latest report on identity theft trends, "Identity theft-related credit card fraud decreased 6 percentage points since calendar year 2007, declining 3 percentage points each year. Additionally, overall CSN identity theft complaints declined 5 percentage points from calendar year 2008." It's hard to see how identity theft could be the fastest-growing crime when it's decreasing.
Lifelock no longer claims that the crime is one of America's fastest-growing, according to a spokesperson. And to be fair, the idea that ID theft is the fastest-growing crime continues to be promoted by virtually every company in the industry, along with many journalists. But even in 2008, it wasn't clear that identity theft was the fastest-growing, or growing at all. According to the FBI, the number of identity theft-related cases it investigated fell from 1,678 in 2005 to 1,255 in 2006
Identity theft, as defined by the FTC, occurs when a criminal appropriates personal identifying information such as a credit card number or Social Security number and uses it to commit fraud or theft. This can be a big problem for victims, but the truth is, it usually isn't. Most victims have no out-of-pocket expenses, and the median time to resolve the problem was four hours, according to the FTC. That's because, most of the time, identity theft involves a fraudulent credit card charge or a similarly minor crime. Victims are rarely held financially responsible, and fixing it involves calling the card issuer.
Perhaps consumers are catching on, because a new report from Javelin Strategy & Research said the ID protection business saw a 42% drop in new adoptions in 2009. (Javelin's report also states that the number of ID theft victims has been going up but doesn't explain why its number differs from the FTC and FBI figures.) It's no surprise, then, that Lifelock says it's now targeting small business owners and trying to convince them to purchase the services, which cost about $10 a month per employee.
Best idea: Say no, and turn identity theft protection into the most-refused financial service in America.
Image courtesy of flickr user Don Hankins, CC2.0