More than 300 corporate security breaches have already been reported in 2011, according to Privacy Rights Clearinghouse. These breaches have involved nearly 23 million sensitive records, as compared with 12 million for all of 2010. Sony, Citigroup, and Morgan Stanley Smith Barney are among the major firms that have reported personal information about their customers, which could be used to commit identity theft, being accessed by hackers or otherwise compromised.
Federal law requires banks to inform customers of breaches. Additionally, a breach of personal electronic data by businesses triggers mandatory notification laws in 46 states as well as Washington D.C., Puerto Rico, and the U.S. Virgin Islands. Large firms typically contact all customers regardless of residency.
The Seriousness of Breaches
The number of American adults who fall victim to identity theft is only four percent, but the number among those who have been notified of a security breach is 17 percent, according to Javelin Strategy & Research. According to Javelin's annual Identity Fraud Survey Report, there was a drop in the number of identity thefts in 2010, but a higher cost to victims.
Respondents in that survey reported an average stolen amount of $4,607, and an average loss to the consumer of $631. The average amount of time spent resolving the issue was 33 hours.
What Should You Do?
Breach-of-security notices are becoming far more commonplace. This is not reassuring for consumers, but it's a reality of high-tech communications and data storage. Still, consumers need not panic and close their checking accounts or cancel their credit cards, but they should also not ignore letters that inform them of security breaches. It is important to know what data may have been breached. If your credit card numbers are potentially at risk, you are advised to alert the fraud division of the credit card issuers. It is always advisable to monitor credit card activity on monthly statements very carefully and call the credit card issuer if there is any questionable activity.
If banking information is at risk, you can change your password and personal identification number, while also notifying your bank to be aware of the breach if the letter came from another source. If your Social Security number may have been breached, you should act fast and put a fraud alert on your credit files by calling one of the three major credit reporting agencies, which will notify the other two. You can also request a "security freeze," which prevents anyone from opening credit in your name. It is also advisable to contact the Federal Trade Commission (FTC) for more information on identity theft.