Identity theft insurance: Safeguarding your business

Case 1

A teen fraudster was recently arrested by the cyber cell of the Ahmadabad
Crime Branch for allegedly using US credit cards in a fraudulent manner. It was
later learnt that the fraudster earned Rs 1 lakh per month by selling online
iTunes gift certificates to customers from Germany and other countries.

The fraudster used to purchase iTunes certificates online from the US for
$100 each using other people's credit card details and sell them for $110.
Inquiries revealed that the he operated a virtual savings account with PayPal on
eBay, where he used to deposit his earnings from online transactions.

Case 2

A computer intrusion into a Citibank server that processes ATM withdrawals
led to two Brooklyn men making hundreds of fraudulent withdrawals from New York
City cash machines in February. The fraudsters ended up withdrawing at least
$750,000 in cash, according to federal prosecutors.

Earlier Citibank was also involved in data breach incidents. In May 2005
workers at a call centre in Pune, were arrested for looting $3,50,000 from the
accounts of Citibank's US customers.

Case 3

A 32-year-old senior media executive in Mumbai was recently pick-pocketed
while he was on his way to work. The thief stole his purse which carried both
the debit card and the credit card but even before he could call the banks, the
thief had already bought goods worth Rs 40,000 and withdrew Rs 88,000 in cash
from his accounts.

An identity theft insurance policy generally covers one for the expenses they may incur if their identity is stolen

The whole process of calling up the call centers and the verification process
took the executive about 45 minutes to block just one card.

Wondering what these instances have to do with you? Well, identity theft can
happen to anyone from the upwardly mobile social strata, which includes you.

So, as a solution provider (SI) you may need identity theft insurance either
for your own business or for your personal usage. Besides, if your business
garners, stores or handles customers' or employees' confidential, personal or
financial data, it is critical that you consider business identity theft
insurance.

Highlights of the policy

Unlike abroad, banks and financial institutions in India are yet to offer
identity theft insurance policy to its customers. While HDFC is in some way
offering the services others are yet to formulate a policy. But given the rate
at which cyber crimes are on the rise in the country, soon many banks and
insurance companies will join the fray.

An identity theft insurance policy generally covers you for the expenses you
might incur if your identity is stolen. These might include anything from legal
fees for defending criminal charges associated with identity theft; telephone
calls; postage; or rejected loan application fees and lost wages if you have to
take time off work to reclaim your identity. So if you cannot afford to pay
these expenses, you can look to buy the insurance.

All one needs to do is pay a monthly or annual fee for your identity theft
protection policy. Most of these policies include access to your credit report
and will notify you if any changes are made to your report.

Throwing light on the same, Rajat Khare, CEO and Director, Net Appin Group
mentioned that the policy ensures coverage when loss of customer information
occurs, including costs associated with legal defense, loss notification,
restoration of business reputation and identity theft assistance.

What's in it for Sps?

So as SP you may be wondering whether you can safeguard your or your
employee's assets with the insurance in place?

Well, the good news is that you can.

Khare stated, “Employee's assets can come under this policy. Data privacy
laws are big in US and the trend is coming to India. At the same time we have to
comply with federal laws.”

Sriram Vishwanathan, Channel Manager-India & SAARC, RSA opined, “Yes, there
is a lot of scope for channel partners to leverage this space. Partners can
provide solutions and consulting services around data protection, encryption
technologies and key manage-ment. In addition to this, there is a lot of
associated work with securing the storage of this information.”

The SPs take

On speaking to the SPs few did suggest that they had a vague idea about the
trend but at the same time were not aware of the highlights of the policy.

Harison Sharma, CEO of Mumbai-based Solus Software Systems indicated, “I am
aware of the terminology and the trend revolving around the same. If there is
such a policy that covers expenses for stolen identity and covers cost
associated to legal fees for defending criminal charges associated with is
offered, This seems the best possible solution given the fact that security is
always one of our key concerns.”

Ajay Khurana, CEO of Kolkata-based Microteck Software stated, “Though I don't
think that such a policy exists in India but identity theft is a concerning
issue. However, if offered, companies irrespective of its size will consider
buying one.”

Delhi-based Sanjeev Bhavnani, CEO, Visesh Infotecnics added, “Given the rate
at which cyber crimes are increasing companies won't mind buying such a policy
if offered.”

Pooja Sharma

poojas@cybermedia.co.in