Winning the identity-theft war with safeguards built into ALE

The very last thing any displaced family in the Gulf after Hurricane Katrina, or in Kansas after a tornado, or in Florida after a natural catastrophe needs to hear is, “I’m sorry, now your ID has also been compromised.” And while many in the insurance industry, including its service providers, dedicate themselves to making a difference when their customers need it most, another less predictable threat than the weather patterns that brought us Category 5 hurricanes expose already-battered families to yet another hardship—that of identity theft. And, the sad part is that, although unpredictable in timing, ID thefts can be prevented when taken seriously by the ALE community.

In 2007 alone, identity theft and data breaches were recorded at all-time highs and media attention surged on the news that the techniques of thieves were constantly evolving. In fact, data breaches in the US have exposed information from well over 220 million records, about equal to the number of people over the age of 18 in the US. ID crimes have passed the number of crimes reported than those in drug trafficking. Reports suggest that virtually every adult in the country has had personal information exposed and is open to possible fraud.

This is because identity is much more than just simply numbers on a credit card. A person’s identity includes many parts—vital personal information such as Social Security numbers, driver’s license number, date of birth, address, e-mail password, and ATM information—that are exchanged constantly in everyday life, well outside the boundaries of charging at the mall.

Two factors that are cited in the growth of identity theft include: first, simply a lack of understanding about identity theft by consumers and how they should safeguard their own information; and secondly the sheer number of places that identity information is digitally stored, from the local grocery store using a retailer card, to dentist’s patient files, and from good old fashioned paper records to administrating an ALE claim.

Information is the key to controlling identity management in ALE. And while complete identity theft prevention is not possible, the best approaches to preventing it include simply understanding what data is at risk and learning how to mitigate the potential for compromised personal data.

Since the ALE community has more access to personal data like cell phone numbers, date of birth, and other identifying factors, the practices we use or do not use put our customers at a much higher risk. Simply put, if the ALE community does not take private information seriously, the higher the chance that we enable security breaches just when our customers need it least.

So, how can we prevent what typically costs our clients up to $5,000 to restore their good name? The insurance community can do plenty to prevent ID theft and Sedgwick’s temporary housing division’ STAND GUARD (TM) Security Program is at the forefront of ensuring that unwanted thefts are prevented before they have a chance to obtain their lifeblood – personal data.

“ALE companies who proactively tackle the issue of identity theft ‘head-on’ will not only gain the trust of their customers but the respect of their industry,” said Robert Siciliano, CEO, IDTheft Security.com

“Risk mitigation starts with prevention and I would encourage the insurance industry to do it not only because it is a value-add to the carrier client; but more importantly, because it is the right thing to do for the customer who is in dire need when they are calling you. The StandGuard program from Sedgwick’s temporary housing division is an example of a ‘best practice’ in the industry.”

Carriers are looking for ALE agreements to include clauses where the vendors agree to take full responsibility for safeguarding customer materials and will ensure to take steps and adopt security measures necessary to protect the customer from loss, corruption or disclosure.

At Sedgwick’s temporary housing division, all data from all carriers in all forms are reviewed for different security requirements to protect the policyholder’s sensitive information from compromising situations. Each ALE element—from physical data and files, electronic data and system access, print and electronic communications (web portals)—is firewall-protected and hacker-proofed. Employees undergo extensive security checks and training on data handling and with two security officers on staff, the program is constantly monitored. To ensure the program is up-to-date on ever-evolving global theft tactics, the system is audited twice a year by independent security audits.

With no government, insurance body, or financial organization monitoring the various pieces of any consumer’s identity in ALE claims, it falls to the consumer to secure their own identity footprint. And it falls to the ALE community to assist those same consumers when they really need it the most. Sedgwick’s temporary housing division has pledged to consistently make a difference in preventing ID theft by employing the newest technologies to seriously prevent the opportunity for new ways to combat identity theft and fraudulent behavior with personal information during the ALE claim.

By Aaron Wilson, Managing Director, Sedgwick’s temporary housing division. As Seen In the April 2008 Issue of Claims Magazine.