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Identity theft is growing, and with the increasing potential for serious consequences, business executives need to have this threat on their radar screens. Bear in mind that a single person rarely perpetrates identity theft. Our research shows that about 60 percent of identity thieves operate in rings. A single person may steal the information, but the data is then distributed to others. What’s more, identity theft is seldom a single incident. The theft itself is the first crime, but the fraudulent use of the identity may take place again and again before the crime is discovered. Here’s another reason to pay more attention to identity theft.

If you assume that identity theft won’t make your customers think twice about doing business with you, consider this: One of the first questions victims ask when they contact us is whether they should change banks or credit-card companies or retailers. (We tell them no.) As the number of consumers who do business electronically continues to grow, we hear more people say that they no longer shop or bank online because they’re afraid of having their identity stolen. What to Do !! Forget about the notion that there’s nothing you can do about identity theft. By taking a few practical steps, you can go a long way toward circumventing this pernicious crime.

Two key reasons for the burgeoning rate of identity theft are ignorance and apathy. We hear about high-tech tricks such as phishing and low-tech approaches such as dumpster diving and assume that most identity theft occurs one consumer at a time. But our research shows that up to 70 percent of identity theft occurs within companies. What’s more, we’re engaging in business practices that vastly increase the risk of insiders stealing identities. As we conduct a greater portion of our business electronically and outsource potentially millions of jobs to other countries, we become increasingly vulnerable to misuse of sensitive information. The solution is twofold.

It’s not enough to invest in the appropriate level of IT security. It takes a combination of technology and procedures to prevent identity theft by dishonest employees or vendors—the most likely perpetrators. Even when the crime is committed by outside hackers, it’s usually in collaboration with insiders. Therefore, identity protection needs to become part of your budgeting process and integral to how you do business. That’s because identity theft is a crime whose impact can be felt far into your organization’s future.