Eye on the Market

Consumers Still Concerned About ID Theft

A recent poll of 6,703 adults shows that Americans are concerned about ID theft.

According to a Zogby poll, 91 percent of respondents are concerned their identities might be stolen and used to make unauthorized purchases.

The results of the online survey show that 50 percent of respondents are "very" concerned about ID theft, with 94 percent of adults aged 65 and older saying they worry about the possibility. Eighty-nine percent of adults aged 18 to 29 are worried about identity theft.

The survey also shows that respondents worry about what companies do with their customers’ personal information, with 91 percent of respondents saying they are concerned that retailers, banks and credit card companies sell their personal information for marketing purposes. Eighty-three percent of respondents fear their personal information could end up in the hands of others through theft or sale.

Survey respondents varied on their opinions of the degree to which their personal information is protected by such companies. Thirty-four percent of respondents say they are not confident that retailers, credit card companies or banks in possession of customers’ personal information are taking the appropriate steps to protect that information. However, 28 percent of respondents say they believe companies are doing a good job protecting consumers’ personal information.

While 85 percent of respondents say the privacy of their personal information is important, only 24 percent "most of the time" read the privacy policies of the companies they do business with.

Survey results are available at www.zogby.com.

Darwin Professional Underwriters, a specialty insurance company and provider of technology liability insurance, has developed an online calculator to help companies assess potential loss from data theft.

The Tech//404 Data Loss Cost Calculator provides companies with an interactive tool to assess the impact of a data breach or data loss incident. Darwin analyzed data from media and industry analyst reports, including the Ponemon Institute’s 2006 self-reporting security breach survey and cost analysis of 31 companies spanning 25 industry segments to come up with the tool’s algorithms.

Tech//404 allows a business to estimate its financial exposure in three categories: internal investigation expenses, customer notification and crisis management expenses and regulatory/compliance expenses.

The online tool, available at www.tech-404.com/calculator.html, can graphically display the impact of loss expenses by major category and individual line items. However, in light of the scarcity of data, the economic effect of potential civil lawsuits cannot currently be calculated, according to Darwin Professional Underwriters.

Texas AG Takes Action Against CVS in ID Theft Case

Texas Attorney General Greg Abbott took legal action against CVS Pharmacy in mid-April for exposing its customers to ID theft.

According to court documents filed by Abbott, CVS violated the 2005 Identity Theft Enforcement and Protection Act, which requires businesses to protect customer records that contain sensitive customer information, including credit and debit card numbers. The Office of the Attorney General (OAG) can seek penalties of up to $50,000 per violation under the law.

Investigators with the OAG discovered that a CVS store in Liberty, Texas, exposed hundreds of its customers to identity theft by failing to properly dispose of records that contained sensitive information. The investigation was launched after reports indicated that bulk customer records were tossed in a Dumpster behind the store. Investigators also found several medical prescription forms that included personal information.

Abbott also charged CVS with violating Chapter 35 of the Business and Commerce Code, which requires businesses to develop retention and disposal procedures for their clients’ personal information and provides for civil penalties of up to $500 for each record.