Friday, July 28, 2017

Fight Fraud with Employer Sponsored Identity Theft Protection

Employer sponsored identity theft protection is a relatively new benefit that employers can offer their employees. In this article, I'm going to walk through what identity theft protection is and why it is important. I'll also cover some of the risks employees face and how they can be helped by being offered an option to protect themselves. In addition to that, I'll talk about some ways these programs can be added to your benefit program.

What Is Identity Theft Protection?

There are really three parts to identity theft protection. First, there's prevention of your personal identifiable information (PII) from being stolen in the first place and being used by others. Second, there's the monitoring of where your information is contained to get early detection in case of unauthorized use. Finally, in case of an actual identity theft, there's the resolution component to help recover from it.

Why Is Identity Theft Protection Important?

In today's digital world, your personal information is constantly under attack. A 2017 Identity Fraud Study by Javelin Strategy & Research showed a 16 percent increase in identity theft fraud. It affected 15 million consumers in the United States for more than $16 billion dollars.

These were record numbers since they've started keeping track of these statistics. This means the threat to your personal data is also at an all time high and most people are unprepared and unprotected.

How Can Thieves Use Your Employees Identity?

Your employees personal identifiable information can be used in a variety of ways to steal money. There are several ways that fraud can show up.

Some of those areas are:

  • Financial identity theft Thieves can take over existing accounts or open up new accounts and run up debt in your name.
  • Tax identity theft False returns can be filed to steal your tax refund.
  • Utility identity theft Cable services, power services and other utilities can be targeted to sign up for services.
  • Payday loan identity theft High interest payday loans can be obtained and left unpaid.

As you can see, there are many avenues that your personal information can utilized once it's obtained and why identity theft protection for employees is important.

The Two Key Components to Identity Theft Protection Benefits

Employers should look at two options when adding identity theft protection to their menu of benefits. The first is resolution assistance and the second is monitoring services. Let's have a look at how both components work.

  1. Resolution assistance Resolution assistance helps employees resolve the problems associated with having their identity stolen. In addition to providing help resolving unauthorized use of personal identifiable information, resolution services usually are accompanied by expert guidance and the potential to have the expenses of resolving the problems reimbursed up to certain limits.
  2. Monitoring services To head off identity theft as quickly as possible, monitoring services alert employees to the unauthorized use of their identity to limit the damage that can be done. Monitoring services usually include a more proactive set of tools to prevent identity theft in the first place. In addition to education to thwart phishing and hacking attempts, monitoring services also monitor your financial life through credit reports, social security services, payday loan fraud and court records to name a few.

A good identity theft protection program would include both options although because the cost is minimal per employee, adding resolution assistance at a minimum would be a valuable option as well.

Employer Paid vs Employee Paid Protection

Once you've decided that you want to add identity theft protection as an employee benefit option, you'll need to decide whether you as the employer will pay for all or some of the program or if it will be offered on a voluntary basis. 

There are four options you could choose from:

  • Option 1: Employer-paid resolution assistance only: To assist any employee who becomes a victim of identity theft, an employer paid stand alone resolution assistance program provides a safety net of help employees could use if needed. Monitoring services would not be included.
  • Option 2: Both the resolution assistance and monitoring services fully paid for by the employer: As the employer, if you want to provide a rich employee benefit, you could choose to pay for the full cost of both the resolution assistance and monitoring services packages for all of your employees.
  • Option 3: Employer-paid resolution assistance with employee-paid monitoring: Alternatively, because the resolution packages are cheaper than the monitoring services, you as the employer could opt to pay for just the resolution assistance and then offer the monitoring services to employees on a voluntary basis. Employees then would have the option to choose whether or not they want to add the second layer of protection and pay for the monitoring service via the convenience of payroll deduction at a reduced group rate.
  • Option 4: Resolution assistance and monitoring services : The fourth option is to offer the option to purchase both the monitoring and resolution services to the employees at their own expense via payroll deduction.

Whether it's paid for completely by the employer or fully paid for by the employee, offering any of these options also raises the awareness of your employees that identity theft is a real problem they need to think about.


Fraud from identity theft is at record levels. Offering your employees an option for identity theft protection is a great way to enhance your overall benefit package in ways that most employers benefit packages don't.

If you have any questions about identity theft protection, let me know in the comments. If you want me to help you install an identity theft protection plan for your employees don't hesitate to contact me for more information.

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Michael is a champion of guaranteed issue for employees in the workplace. He's been an insurance agent since 1992 and has worked with thousands of employees.