Facts About FACTA, Or What Does FACTA Mean To You And Your Company
by:
Steve Mueller
Ever heard of FACTA? Most of us would say “No”. Have you heard that you can get a free credit report? To that we would say, “Yes”. So you have heard of FACTA. But how does that affect me?
FACTA stands for Fair and Accurate Credit Transaction Act. The law went into effect Jan. 1, 2005. FACTA is the law which allows all Americans access to their credit report once per year. So what does that have to do with you?
On June 1, 2005, a new provision of FACTA went into effect. It says that any employer (even if you only employ one person) whose action or inaction results in the loss of employee information, can be fined by federal and state government, and sued in civil court.
Bet you didn't know that. But you need to know, and need to know what you can do to protect yourself.
Small Businesses will be affected the most.
‘"A small businessman who makes a mistake could bear the brunt of a regulation like this," says James Plummer, policy analyst at Consumer Alert, a non-profit group that focuses on a free-market approach to consumer regulations.’
If you don't shred and information gets out, there are penalties. But what if you do shred all potential employee information, and take all necessary precautions to protect your past, current, and future employees’ identities, and the information still gets out somehow? Under FACTA, you could still be held responsible.
You may not think information theft could happen to you, but neither did a lot of companies, universities, government institutions, and businesses that have had employee or customer information stolen from them that have been in the news lately:
Lexis Nexis
University of Northern Colorado
California State University (Chico)
University of California – Berkeley
University of Maryland
Las Vegas Department of Motor Vehicles
Bank of America
Choice Point
Weld County (CO) Employees (information stolen by an inmate while in jail)
How can you, as an employer, minimize your liability?
There are hundreds of things you can do to minimize liability, which are probably things you already do. Document shredding, careful screening of employees who will be coming into contact with personal information of customers and employees, physically locking file drawers with sensitive information, and setting up firewalls on computer equipment connected to the Internet, among hundreds of other solutions, are all good ideas.
As Ben Franklin said, “An ounce of prevention is worth a pound of cure”, is definitely the case when it comes to securing personal information. However, no matter what prevention steps you take, there is no 100ffective way to be sure that employee’s information won’t be compromised. Even if the information doesn’t get out from your company, an employee can claim that it did.
That's a scary thought! What if an employee claims that their information was stolen through the actions of your company, but there’s no real proof to back it up? You will end up hiring (or using) an attorney to represent and defend you and your company in court. At $200 - $400/hour for most attorneys across the United States, how long can you afford to defend your company?
So what can you do?
One solution that would at least provide an affirmative defense against the fines, fees, and lawsuits you could incur as an employer, is to offer some sort of Identity Theft protection as a benefit to your employees.
As an employer, you can choose whether or not to pay for this added benefit. However, the most important thing you can do is to make the protection available, and have an employee meeting, to help employees understand Identity Theft and the protection that you are making available to them. When you make the protection available, and when your employees have been educated on the dangers of Identity Theft, they can either elect to have identity theft coverage as a benefit, or they can decline the coverage as a benefit.
If the employee has Identity Theft coverage and becomes a victim, it is beneficial to your business, because an employee with Identity Theft coverage will be notified immediately of the theft, spend less time, less money, and will experience less frustration while trying to have their information restored. This will get them back on the job and focused on work more quickly.
If the employee declines the coverage, and later claims that the information was stolen as a result of you or your company’s actions, you have a piece of paper, with their signature, saying that they attended the presentation and declined the coverage.
Choosing to not make Identity Theft coverage available leaves you exposed to an unlimited dollar amount that you can be sued for under civil liability, federal fines of up to $2,500.00 per employee per incident, and state fines of up to $1,000.00 per employee per incident.
Recommended course of action? Have a benefits consultant who offers an Identity Theft protection plan present to your employees. Help them set up a 20 minute presentation with your employees, and make it mandatory that all employees attend. You want your employees to be protected from this awful crime. If they choose not to be, but you’ve given the option of being protected, then the liability becomes theirs, not yours, when they become a victim of identity theft.
About the author:
Steve Mueller has over 25 years of human resource experience. He has worked in various fields of human resources; as a Trainer for Cooper Industries, Compensation and Management Development Manager for Zenith Electronics, Plant Personnel Manager for a motor manufacturing company and Benefits Manager for a multi-location distribution company. Steve holds a bachelors of science degree in education from Pittsburg State University. He has taught numerous adult education classes and seminars in the community. Steve has received community service awards for his participation in elementary school child safety programs.
When you are involved in an accident insurance claims may not be the
first thoughts on your mind. However, there are some procedures you should
follow in order to preserve your right to file an insurance claim. This
may be anything from hail damage to a stolen vehicle and does not refer
solely to car accidents.
The first thing you want to do is prevention. Most insurance claims can
be prevented even before the incident occurs. For instance, to prevent
auto accident’s be cautious and think about taking a defensive driving
course. To prevent stolen vehicle insurance claims, keep you vehicle
locked up and parked in a secure place. To prevent damage from the forces
of nature do not travel in bad weather and keep your car in a covered
parkway. There are many ways to prevent yourself from incurring loss. Most
ideas are just common sense. However, for more information contact your
insurance agent for ideas on prevention. Next, you will want to remain
calm. When disaster strikes people react. That is our nature. However,
sometimes people’s reactions can make things worse on their insurance
claims.
If you’re in a car accident this might mean taking the blame, leaving
the scene of an accident, or putting your self in danger. If you’re car is
stolen you may act on your reaction by accusing innocent persons. There
are a number of problems that can arise when people over react that is why
it is essential to your insurance claim for you to remain calm.
Now, the next thing you need to be aware of is time. You see, time is
not on your side when filing an insurance claim. The longer you wait the
less your chances are of recovering your loss. Most insurance companies
will not even consider a claim if it was turned in a certain amount of
time after the incident. It is also harder to prove the longer you go
before submitting an insurance claim.
Finally, you will want to follow procedures and document everything.
Insurance companies are hit with frauds all the time. In order to weed out
the actual claims from the fraudulent ones, they have to have clear cut
procedures. Unfortunately, this can sometimes be confusing to actual
victims. Yet, they are in place out of the need to protect the company.
This means that you will have to educate yourself to what the policies
are. Find out what documentation you need and what forms you will have to
file. If you need help, contact your insurance agent. That is what they
are there for. If you follow this advice, you should be able to file a
claim relatively easy and with the least amount of lag time before
payment.
Afrikaans 
Albanian 
Amharic 
Arabic 
Armenian 
Azerbaijani 
Basque 
Belarusian 
Bengali 
Bosnian 
Bulgarian 
Catalan 
Cebuano 
Chichewa 
Chinese (Simplified) 
Chinese (Traditional) 
Corsican 
Croatian 
Czech 
Danish 
Dutch 
English 
Esperanto 
Estonian 
Filipino 
Finnish 
French 
Frisian 
Galician 
Georgian 
German 
Greek 
Gujarati 
Haitian Creole 
Hausa 
Hawaiian 
Hebrew 
Hindi 
Hmong 
Hungarian 
Icelandic 
Igbo 
Indonesian 
Irish 
Italian 
Japanese 
Javanese 
Kannada 
Kazakh 
Khmer 
Korean 
Kurdish (Kurmanji) 
Kyrgyz 
Lao 
Latin 
Latvian 
Lithuanian 
Luxembourgish 
Macedonian 
Malagasy 
Malay 
Malayalam 
Maltese 
Maori 
Marathi 
Mongolian 
Myanmar (Burmese) 
Nepali 
Norwegian 
Pashto 
Persian 
Polish 
Portuguese 
Punjabi 
Romanian 
Russian 
Samoan 
Scottish Gaelic 
Serbian 
Sesotho 
Shona 
Sindhi 
Sinhala 
Slovak 
Slovenian 
Somali 
Spanish 
Sundanese 
Swahili 
Swedish 
Tajik 
Tamil 
Telugu 
Thai 
Turkish 
Ukrainian 
Urdu 
Uzbek 
Vietnamese 
Welsh 
Xhosa 
Yiddish 
Yoruba 
Zulu
