America’s fastest growing white collar crime

*

you
Could Could
be at risk? be at risk?
* 2003 FTC Report

Identity Theft
     

What is Identity Theft? The Cost of Identity Theft Important Legislation Industry Response The Best Answer Action Steps

Major Metropolitan Areas Ranking for Identity Theft – Related Consumer Complaints 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Phoenix-Mesa-Scottsdale, AZ Las Vegas-Paradise, NV MSA Riverside-San Bernardino-Ontario, CA Dallas-Fort Worth-Arlington, TX Los Angeles-Long Beach-Santa Ana, CA Miami-Fort Lauderdale-Miami Beach, FL San Francisco-Oakland-Fremont, CA Houston-Baytown-Sugar Land, TX San Diego-Carlsbad-San Marcos, CA San Antonio, TX

The Facts
IDentity
Theft

What is Identity Theft?

What Is Identity Theft?
Five Common Types of Identity Theft

Drivers License Identity Theft

Social Security Identity Theft

Medical Identity Theft

Character / Criminal Identity Theft

Financial Identity Theft

Identity Theft is not just about Credit Cards!
ID Theft is an international crime and access to an attorney will be critical

Identity Theft
Driver’s License Identity Theft
Thieves use your information to acquire a driver’s licenses in your name or claim to be you during a traffic stop
♦ You could receive DWI, DUI, and other driving-related charges ♦ Your driving privileges could be suspended or revoked ♦ You could be arrested during a routine traffic stop for crimes you did not commit

Identity Theft
September 10, 2005 “Fearing fraudulent driver’s licenses may be in the hands of thieves, illegal immigrants or even terrorists, the Registry of Motor Vehicles has launched a probe into 140,000 unverifiable Social Security numbers that were used to obtain ID’s …”

Identity Theft
“An 82-year-old grandmother, quit driving during the Truman administration.” In 2001 she “suddenly found herself in what she describes as a ‘living hell’ after one of her neighbors, arrested on drunk-driving charges … pretended to be her. ‘I was told there were warrants for my arrest … I was afraid to answer the phone’.”
February 2004

Identity Theft
Social Security (SSN) Identity Theft
Thieves use your SSN Identity to gain employment or to report income under your name
♦ Thieves take the income, but don’t pay the taxes, leaving you with the bill ♦ Wanted criminals use your SSN Identity so they can get employment without being found ♦ Illegal immigrants use your SSN Identity to gain employment. ♦ Thieves and Criminals use your SSN for employment, medical, financial, criminal, school, and other purposes.

Your SIN in Canada

Identity Theft
The Secret List of ID Theft Victims A Chicago woman “applied for a job at a local Target department store and was denied. The reason? She already worked there – or rather, her Social Security number already worked there. Follow-up investigation revealed the same Social Security Number … used to obtain work at 37 other employers.” “People need to wake up to this problem. They are destroying people’s credit, Social Security benefits, and everything else.”
Jan. 29, 2005

Identity Theft
Medical Identity Theft
Thieves use your information for insurance benefits, Rx, Medicare, Medicaid benefits, or for medical tests
♦ Your rates could go up or your coverage could be cancelled or used up ♦ You could owe thousands of dollars for a procedure you never had ♦ You could be unable to obtain medical or life insurance, other coverage, and/or employment because of conditions that you do not have (AIDS, Diabetes etc…)

Identity Theft
March 2006:

The March 2006 issue of Consumer Reports portrayed a different side of Identity Theft when they devoted an entire section to your medical identity.

Identity Theft
Medical Identity Theft: The “If the person who steals your information crime that can kill you health identity has allergies or specific medical conditions that “As the health care system transitions from paper-based to collide with yours for instance … when you go in for care, you electronic, this crime may become easier to commit and harder to may experience a dangerous drug interaction or unknowingly trace. Victims may find it more be denied potentially lifesaving difficult to recover from medical identity theft as medical errors are medications or treatments disseminated and redisseminated because they will assume the through computer networks and thief’s medical information is other medical information-sharing yours.*” pathways.*” Sept. 2005 May 2006
*Carole Pennington 9/7/2005 *Pam Dixon, Pg 3.,5/3/2006

Identity Theft
Character / Criminal Identity Theft
Thieves mask their criminal activity behind your identity
♦ You could be arrested ♦ You could be denied employment because of fraudulent criminal records found during routine background checks ♦ Security checkpoints at airports could become a nightmare for you ♦ You could be denied a passport and be barred from leaving the country

Identity Theft
The October 2005 issue of Kiplinger’s Personal Finance portrayed a different side of Identity Theft when they devoted an entire section to character/criminal identity theft. “Identity Theft Update: Could losing your wallet land you in jail?*” October 2005
* Cover, Kiplinger, October, 2005

Identity Theft
Financial Identity Theft
Thieves use your information to open new accounts or to gain access to existing accounts
♦ Thieves rob your bank accounts ♦ They rack up outrageous charges on credit cards, take out new loans, and more ♦ They destroy your credit, forcing you to pay higher interest rates ♦ You can absolutely be held responsible for the debts incurred by the thieves

Identity Theft
ID Theft Victims Face Tough Bank Fights*
• In 2003, The Korinke family was sued by Homecoming Financial Network INC., a division of GMAC, for $75,000, plus attorney fees. • In 2001, an imposter got hold of a line of credit, switched the address, and the Korinkes never received the outstanding bills. • Homecomings … claimed the Korinkes had been negligent. “The Korinkes were slow to discover and report the identity theft … as such, Korinke is liable for any and all sums attributed to his negligence.**” • Korinke’s attorney said “ victims who don’t have the means to find a good lawyer, may be losing out in battles with financial institutions.***”

*2/18/04

February 2004

** Pg.2 *** Pg. 3

Identity Theft
“Each year, 7 to 10 million Americans fall prey to Identity Theft… From massive data-brokerage firms to tiny local banks, your identity is irretrievably ‘out there.’ ”

Identity Theft
The DataBased You™ The July 2004 issue of PC Magazine laid out what we have dubbed, ™ The DataBased You. “Nowhere to Hide. The average American is listed in at least 50 databases, and that’s not counting government files.*”
* Pg 129, PC Magazine, July, 2004

Identity Theft
The DataBased You™ Meet The DataBased You

Identity Theft
The DataBased You™
Your Insurance Claims Your DNA Your Driver’s License # and Record Your Military Record Your Fishing License Your Real Estate Deeds Your Car Registration Your Medical Records Your Phone Number Your Legal History Your Credit History Your Birth Certificate Your Name Your Social Security Number Your Address Your Fingerprints

Identity Theft
The DataBased You

Between Feb. 15th 2005 and Aug. 9, 2006: Whether it was hacking, lost computers or lost data tapes, there were

90,925,922*
records lost due to computer data breeches from major companies.
privacyrights.org

Identity Theft Lost, Hacked, or Stolen… Notables
 ChoicePoint:  CitiFinancial:  MasterCard:  AOL:

145,000 3.9 Million 40 Million
So many laptops … we lost count i.e. Hotels.com (Ernst & Young)

92 Million Admin: 26.5 Million

 Veterans  Bank

of America: 1.2 Million

 Acxiom:

1.2 Billion control The DataBased You You can’t

Identity Theft

Identity Theft

Identity Theft
Identity theft is rampant. Not only can thieves use your credit cards fraudulently, but they can also get enough personal information from your birth certificate, passport, driver’s license and social insurance number to clone another entire you.

The Facts
IDentity
Theft

The Cost of Identity Theft

Identity Theft
The Cost to Individuals
 The  The  The

average dollar amount charged in Identity Theft: $92,893 average number of checks written in Identity Theft: 74.6

average number of credit card applications approved through Identity Theft: 8.4 Laws hold victims partially responsible for fraudulent debt after 48 hours, and hold them fully responsible if not reported within 60 days…

Identity Theft
The Cost to Businesses
 Employees

can take up to 600 hours, mainly during business hours, to restore their identities will be held liable if lost information is traced back to their businesses are exposed to class action lawsuits, with fines of $2,500, or more, per employee… now allow for jail sentences for Executives…

 Employers

 Employers  Laws

Identity Theft
“People whose identities have been stolen can spend months or years and thousands of dollars cleaning up the mess the thieves have made of their good name and credit record”
FEDERAL TRADE COMMISSION
“When Bad Things Happen to Your Good Name” — September 2002

Identity Theft
“Thieves are so bold that they held a conference in Kiev, Ukraine, for people interested in breaking into this Growth Industry”

The Trends
IDentity
Theft

Important Legislation

Important Legislation
 F.A.C.T.A.  HIPAA  Gramm,

Security Rule Leach, Bliley Safeguard Rule State Laws (i.e. Texas Whistle Blower Statute)
Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You

 Individual

Important Legislation
“Lawsuits were filed within 3 weeks of the new June 1, 2005 FACTA Law being implemented.”

July 21, 2005

Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You

Important Legislation 1st Law Change to be aware of as an HR Manager
F.A.C.T.A. Applies To Every Business And Individual Who Maintains, Or Otherwise Possesses, Consumer Information For A Business Purpose. Employee or Customer information lost under the wrong set of circumstances results in: •Federal and State Fines of $2500 per occurrence •Civil Liability of $1000 per occurrence •Class action Lawsuits with no statutory limitation •Responsible for actual losses of Individual ($92,893 Avg.)

Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You

Important Legislation 2nd Law Change to be aware of as an HR Manager
H.I.P.A.A. Security Rule (April 21, 2005 and rule’s scope broadens on April 21, 2006) Applies To Any Organization Or Individuals Who Retain Or Collect Health Information. Medical information lost under the wrong set of circumstances results in: •Fines up to $250,000 per occurrence •Up to 10 Years Jail Time for Executives
Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You

Important Legislation
WSJ says HIPAA Security is a “new federal rule requiring … an information security chief … and training for employees on how to comply”.

Important Legislation 3rd Law Change to be aware of as an HR Manager
GRAMM - LEACH – BLILEY (8 Federal Agencies and any State can enforce this law) Applies To Any Organization That Maintains Personal Financial Information Regarding It’s Clients Or Customers Non Public Information (NPI) lost under the wrong set of circumstances results in: •Fines up to $1,000,000 per occurrence •Up to 10 Years Jail Time for Executives •Removal of management •Executives within an organization can be held accountable for non-compliance both civilly and criminally

Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You

Important Legislation Law Change to be aware of as an HR Manager
GRAMM - LEACH - BLILEY & H.I.P.A.A Both Require: •Appointment of an Information Security Officer •Have a written policy to protect NPI •Mandatory Training for employees who have access to NPI

Be Sure To Check With Your Attorney On How This Law May Specifically Apply To You

Important Legislation

The October 2005 issue of the Alberta Venture (business journal) talked about a new breed of criminal. “They’re not after your money, your equipment, or your inventory. A new breed of criminal wants the personal information you keep on customers, suppliers and employees. And if you lose it, you’ll wish they went for the cash.”
* Pg 81, Alberta Venture, Display Until November 11, 2005

The Facts
IDentity
Theft

Industry Response

The best answer is a partnership . . .
Pre-Paid Legal Services , Inc. and Kroll Background America
®

provide The Best Answer:

IDentity Theft
with the Pre-Paid Legal Plan

SHIELD

TM

Harland C. Stonecipher CEO and Founder, Pre-Paid Legal Services, Inc.

Who We Are
PPL Launches the Identity Theft Shield Through Kroll, Inc. Kroll Background America is the world’s leading risk consulting company with more than 30 years of experience. Listed on the Nasdaq

They have been involved in many notable cases: ♦ Assisted the Kuwaiti government in investigating Saddam Hussien's financial network ♦ Responsible for the restructuring of Enron •12/31/05 Department of Homeland Security Awards Kroll Major Background Investigation Contract

Who We Are
Id entity Th eft Sh ield

KROLL, INC. The World’s Foremost Risk Consulting Company Kroll provides a broad range of investigative, intelligence, financial, security, and technology services to help clients reduce risks, solve problems and capitalize on opportunities. • More than 60 offices on six continents • Multi-disciplinary corps of more than 2,200 employees • Serve a global clientele of law firms, financial institutions, corporations, non-profit institutions, government agencies and individuals.

Areas of Coverage for Identity Theft

Continuous Monitoring

Restoration Services

Plus additional benefits

What We Do Continuous Monitoring
 You

will receive an up-to-date credit report through Experian credit files will be regularly monitored. Suspicious activity will be brought to your attention, providing them with early detection will receive prompt notice if any new accounts are opened in your name or if derogatory notations are added to your credit reports

 Your

 You

What We Do Restoration Services
As Identity Theft Shield members you have experienced professionals working for you!
SM

♦ Fraud alert notifications will be sent on your behalf with applicable follow up to affected agencies and institutions ♦ Searches of applicable local and national databases will be made proactively on your behalf to find information that you may not know about
Identity Restoration will not apply if the identity theft is the result of a dishonest, criminal, malicious, or fraudulent act you, your spouse, or your child participated in, directed, or had knowledge of. Restoration services will not be provided for a known stolen identity event that occurred prior to enrollment date. You must be an active member to receive restoration services. Services provided do not cover financial losses arising from the identity theft. A signed limited power of attorney must be provided to Kroll when an Identity Theft Restoration case is opened in order for Kroll to work on your behalf and/or provide the Proactive Database Searches listed. A stolen identity event does not include the theft or unauthorized or illegal use of your business name, d/b/a, or any other method of identifying your business activity.

What We Do
Full Restoration Services
Full Restoration Services provide tremendous relief to you
♦ Full Restoration means that experienced professionals — not you — do the work to clear your name ♦ These services save you up to 600 hours of work…

The Best Answer
The Complete Wall of Protection

Monitorin g Services

YOU

Restoration Services

Life Events Legal Plan

Pre-Paid Legal Services®, Inc.
and subsidiaries

Monitoring and Restoration Services provide incredible support, but they do not include legal help, particularly 24-hour legal access in the event you are being arrested.

The Company
 Over 33 Years In Business
   

Began With A Serious Auto Accident Debt Free 40 Million in Cash Publicly Traded Since 1976
Harland C. Stonecipher Founder, Chairman, and CEO

The Company

Featured in all These Publications!

What We Do
Simply put, a Life Events Legal Plan does for attorney and legal bills what medical insurance does for doctor and hospital bills.

Life Events Legal Plan
Who Is Covered By The Pre-Paid Legal Membership?
1) The Member 2) The Member’s Spouse 3) Never Married Dependent Children
Under 21 Living At Home

4) Full Time College Students Up To Age 23
Never Married, Dependent Children

5) Dependent Children Under Age 18
For Whom The Member Is Legal Guardian

6) Physically Or Mentally Challenged Child

Six Areas of Coverage – Family Plan
I. II. III. IV. V. VI.

25%

Preventive Legal Services

Motor Vehicle Legal Services

Trial Defense Services

Federal Other Tax Audit Legal Legal Service Services

Legal Shield

Lets pretend you’re my attorney…

Life Events Legal Plan
I. Preventive Legal Services
These services are available to you immediately when you enroll!!

 Phone Consultation on an Unlimited Number of Matters  A Letter Written or Phone Call Made on an Unlimited

Number of Personal Issues for You and Your Family

An Unlimited Number of Personal Contracts and Documents Reviewed Up To 10 Pages Each Standard Will Preparation and Yearly Updates Included for the Member, Available to Covered Family Members for an Additional $20 (Living Will and durable power of attorney available upon request).

UNDER TITLE I: A letter or phone call per subject matter is available if advisable in your Provider Attorney’s sole discretion. Nevada residents limited to 50 hours of telephone consultation per year and five personal legal documents reviewed per year. In New York, these benefits are provided at a reduced fee. Check benefit availability in your state/province.

Life Events Legal Plan
II. Motor Vehicle Legal Services
These services are available just 15 days after enrollment!!

Call your Provider Law Firm immediately when you receive a moving traffic violation so proper representation can be arranged. Don’t delay! Motor Vehicle Related Criminal Charges: Up to 2.5 hours for help with driver’s license assistance and/or personal injury/property damage collection assistance of $2,000 or less.

 

The Huge Gap In Insurance . . .
No automobile or umbrella policy will cover you for negligent criminal charges in connection with the operation of a motor vehicle…
(manslaughter, involuntary manslaughter, negligent homicide, or vehicular homicide)

Yet you think you are covered… With a Pre-Paid Legal plan, you are covered if the unthinkable happens…

Life Events Legal Plan
III. Trial Defense
If you or your spouse face a civil suit or job-related criminal charges, your Provider Law Firm will provide up to 60 hours of service - at no added cost - to defend you. Additional pretrial and trial services are available at a 25% discount from the Firm’s standard hourly rate. The longer you keep your membership in force, the more valuable it becomes!

UNDER TITLE III: Trial Defense Services cover the member and spouse for covered civil actions or for criminal actions which arise out of the performance of the covered person’s employment responsibilities. Not covered are dissolution of marriage, separation, annulment, child custody or other divorce-related matters, bankruptcy, charges of DUI/DWI, or drug-related matters. Acts or matters occurring prior to the membership that give rise to a lawsuit even though the lawsuit may be filled after enrollment are excluded as pre-existing conditions. You may use your 25% discount and the unlimited toll-free consultation benefit for any of these exclusions. In New York, these benefits are provided at a reduced fee. Check benefit availability in your state/province.

1st year - 60 hours (2.5 pretrial hours/57.5 trial hours) 2nd year - 120 hours (3 hours pretrial/117 trial hours) 3rd year - 180 hours (3.5 pretrial hours/176.5 trail hours) 4th year - 240 hours (4 pretrial hours/236 trial hours) 5th year - 300 hours (4.5 pretrial hours/295.5 trial hours)

Life Events Legal Plan
IV. Federal Tax Audit Legal Services
Up to 50 hours of Provider Law Firm services once you receive written notice from the IRS that you are being audited or if you are requested to appear at the IRS office regarding your tax return. Coverage for this service begins with the tax return due April 15th of the year you enroll.

UNDER TITLE IV: This portion of the plan does not cover audits of Schedule C only, charges of tax fraud or evasion, corporate, trust, or business returns. In New York, these benefits are provided at a reduced fee. Check benefit availability in your state/province.

Life Events Legal Plan
V. Other Legal Work
Your Provider Law Firm will render assistance at a preferred rate which is 25% less the normal hourly rate for legal services not otherwise covered by the membership.

Even pre-existing matters can be covered under this portion of the plan!

Life Events Legal Plan
Legal Shield
The Legal Shield gives you and your family 24-hour access to legal consultation in the event of an emergency.

•Detained or Arrested •Injured in an Accident •Outstanding Warrants • Involved in matters of Child Custody
To contact your Provider Law Firm, simply call the toll-free number on your Legal Shield card. You will reach the Pre-Paid Legal offices, who will then put you in contact with your Provider Law Firm, so you can consult with an attorney about your detainment. The that easy. It’sLegal Shield service will not apply if the member is alleged to be under the influence of or impaired by alcohol, intoxicants, controlled
substances, chemicals or medicines, whether prescribed or not; the member is alleged to be involved with domestic violence or stalking; and/or the member is being detained for outstanding warrants. Check benefit availability in your state.

How We Help You
1.

Employees Feel More Valuable

“One solution that provides an affirmative defense against potential fines, fees, and lawsuits is to offer some sort of identity theft protection as an employee benefit. An employer can choose whether or not to pay for this benefit. The key is to make the protection available, and have a mandatory employee meeting on identity theft and the protection you are making available, similar to what most employers do for health insurance … Greg Roderick, CEO of Frontier Management, says that his employees "feel like the company's valuing them more, and it's very personal."
Business and Legal Reports 1/19/2006

How We Help You
1.

Potential Early Warning System If a number of your employees get notified of improper usage of their identities, this may act as an early warning system to your company of a possible internal breach.

How We Help You
1.

May Reduce Company Losses
The plan has Full Restoration*, which means the majority of the time in restoring an employee’s identity is covered by the membership and not done on company time and/or company expense. Also, use of our Life Events Legal Plan provides help* that addresses 100% of the problem.
* Subject To Terms And Conditions

The Facts
IDentity
Theft

Action Steps

How We Help You
1.

Mitigating Damages
To protect yourself, you could have all employees sign this document…
Use of Confidential Information by Employee

♦ It makes Employees aware of their legal responsibilities to protect NPI ♦ It serves as proof that handlers of NPI have been through some the mandatory training required by law
Be Sure To Check With Your Attorney Before Using A Form Such As This

How We Help You
Use of Confidential Information by Employee of ABC Corporation
I, , as an employee of , do hereby acknowledge

that I am subject to and must comply with a number of State and Federal laws involving the confidential handling of personal information regarding both customers/clients of ABC Company and other employees. These laws may include but not be limited to FACTA, HIPPA, The Economic Espionage Act, The Privacy Act, Gramm/Leach/Bliley, Identity Theft laws [where applicable], Trade Secrets Protections, and Implied Contract Beach. I acknowledge that I must maintain the confidentiality of all documents, credit cards, and personal information of any type and that such information may only be used for their intended business purpose. Any other use of said information is strictly prohibited and is cause for immediate dismissal. Additionally, should any misuse of information be made by me I understand that I am fully accountable both civilly and criminally. I further agree to follow the rules and regulations of ABC Company in regard to the handling of confidential information so as to protect the privacy of all involved. Date Employee Witness

Be Sure To Check With Your Attorney Before Using A Form Such As This

How We Help You
1.

Mitigating Damages … cont’d
♦ Acts as a Good Faith step in attempting to comply with FACTA, GLB, HIPAA, etc …
March 2006 – “Stolen Lives” Use of Confidential Information by Employee

According to Betsy Broder, assistant director of the FTC’s newly formed Division of Privacy and Identity Protection, “We’re not looking for a perfect system .. But we need to see that you’ve taken reasonable steps to protect your customers’ information”.
Be Sure To Check With Your Attorney Before Using A Form Such As This

The Best Answer
Pre-Paid Legal Services®, Inc. is the only company with a suite of products that provides help in every area of Identity Theft – before, during, and after the crime occurs…

The Best Answer
What Do You Think This Would Cost
For as little as 85 cents per day, families receive a comprehensive Life Events Legal Plan and Identity Theft Shield that provides protection of their legal rights, peace of mind and security.

That's less than the price of a cup of coffee or a bottle of water a day!

Thank You!
Pre-Paid Legal Services®, Inc.
and subsidiaries

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