Cyber Security: Impact of Personal Data Breaches on Employees
Data breaches are surging and taking a toll on more than your bottom line.
Data breaches within organizations are also wreaking havoc on the personal lives of employees. And that’s especially true if they happen to be in the process of finalizing important financial transactions, like buying a house.
That’s because individuals often need to take preventative measures to cut off cybercriminal access to their money, accounts, and personal information after they’ve been a victim of a breach. Unfortunately, these necessary actions can also block loan officers, bankers, lawyers, and accountants, from accessing their personal financial documents and hinder any legitimate financial processes that are already in the works.
While changing passwords and monitoring credit reports are typical steps to take after a data breach, there can be other headaches and repercussions depending on what activities your employees may be involved in at the time of the breach. In the following chart, we outline some of the impacts your employees may experience depending on their specific situations.
EXAMPLE IDENTITY THEFT SCENARIO & IMPLICATIONS
A cybercriminal steals personal information from your workplace system and files a fraudulent tax return in an employee’s name to claim a refund.
Potential Impacts on Employee Include:
- Has “real” tax return rejected by the IRS.
- Must contact the IRS.
- Must continue with tax return, even if it means filing by paper.
- Complete IRS Form for Identity Theft Affidavit and:
- wait up to 30 days to get IRS confirmation
- prove identity by completing an IRS Identity & Tax Verification letter.
- be prepared to answer questions about previous tax returns.
- Work with an IRS Identity Theft Victim rep to review file, process the return correctly, and remove any fraudulent returns from account.
- Possibly pay higher tax-prep fee.
- Undergo extra scrutiny by the IRS indefinitely.
- Keep in touch with IRS over 6-12+ months to resolve issue.
- Get a special Identity Protection Personal Identification Number in order to e-file future returns.
- Complicates future transactions requiring federal income tax returns, e.g., applying for financial aid using the Free Application for Federal Student Aid (FAFSA).
Educate employees about how breaches can affect their personal lives and why cyber security training is a necessary form of defense.
Contact us to learn more about protecting your organization and people.
This material has been prepared for informational purposes only. BRP Group, Inc. and its affiliates, do not provide tax, legal or accounting advice. Please consult with your own tax, legal or accounting professionals before engaging in any transaction.