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St. Paul Travelers

In the Boardroom With...
Mr. Joe Lester
Identity Fraud Product Manager
St. Paul Travelers (NYSE: STA) Thanks for joining us today, Joe. Please give our audience an overview of your background and your role at St. Paul Travelers. 

Joe Lester: I joined St. Paul Travelers in January 2003 as the Identity Fraud Product Manager. In this role, I oversee the underwriting, product strategy, marketing and overall product management of the Identity Fraud Expense Reimbursement products. Prior to joining St. Paul Travelers, I worked in various positions in the insurance industry including corporate audit, regulatory and mutual fund centers. I graduated from Vanderbilt University with a B.A. in 1993 and also hold an M.B.A. degree from Cornell University, which I earned in 1999. One will read in St. Paul Travelers’ recent press release, your comment, “Identity theft is one of the fastest growing crimes in the country. Last year more than 9 million Americans were victimized by it with a total cost to consumers and businesses of over $52 billion, and there is no end in sight." What are some of the trends that have lead to the fast growth of identity theft from your perspective?

Joe Lester: Actually, the most recent report from Javelin Strategy & Research and the Better Business Bureau indicate that ID theft cost businesses and consumers more than $57 billion last year. The majority of that cost is borne by the companies themselves, but consumers did spend almost $4 billion in out-of-pocket expenses. When someone falls victim to this crime, it can take a considerable amount of time and effort to clean up their credit. They may need to take days off from work, meet with lawyers, file police reports, etc. From what I have seen, the growth can be attributed to the growing sophistication of identity thieves. Thieves have figured out how easy it can be to steal someone’s identity and how profitable it is to do so. We now have computer experts and organized crime involved. Many of these thieves are outside of the United States, so it is very difficult for our law enforcement to combat them and bring them to justice. What are the main benefits and features of the St. Paul Travelers ID Fraud Policy?

Joe Lester: As most people are aware, if someone steals your identity and takes out a car loan in your name, for example, you are not responsible for the loan amount. The financial institution that made the loan improperly bears the loss. But, the individual victim is personally responsible for clearing up their credit history, filling out police reports, talking to a lawyer and other time-consuming steps. Clearing one’s credit record can take anywhere from 40 hours to more than 600 hours. It is like having a second job, but unpaid.

Identity fraud coverage is available in two ways from St. Paul Travelers. First, a company or membership group can purchase a group policy to cover their employees, customers or members. Second, people who have their homeowners, renters or condominium coverage through Travelers can purchase an ID Fraud endorsement. Both policies provide insureds with reimbursement for their out-of-pocket expenses. We not only cover items like lost wages and attorney’s fees, but we also cover the smaller expenses like long-distance telephone charges, notary costs and mail costs.

When people fall victim to this crime, they feel frustrated, violated and confused. Oftentimes they do not know what to do or whom to call. To help them, St. Paul Travelers provides victims with a “road map” to guide them along the path of cleaning up their credit history and re-establishing their identity. Our Victim Kit tells people what steps to take, whom to call (including telephone numbers), call tracking sheets, an identity theft affidavit and sample letters to send to financial institutions, creditors and others. All too often, there’s another headline in the news about personal data for tens of thousands of consumers getting “lost” or stolen from a major financial institution. Is the problem getting better or getting worse? Are federal and state government mandates to secure personal data helping?

Joe Lester: I think the increase in the number of victims is a reflection of the new generation of thieves who are more computer-savvy and focused. Whereas in the past, a thief would steal your mail or your wallet and obtain a single identity, now someone can hack into a human resources database at a major company and walk away with thousands of identities all at once. Now, thieves are more sophisticated and work with each other to buy and sell stolen identities.

Studies have shown that if a victim discovers their identity has been compromised sooner rather than later, the overall loss will be less and they will spend less money and time cleaning up the mess. Many states have enacted “notification” laws where a company is obligated to inform people if their identities have been stolen or are at an increased risk of being stolen. Also, several states have or are considering “credit freezes.” With a credit freeze, a consumer can “lock up” their credit report to prevent new credit from being issued. From a consumer’s perspective, these are extremely valuable. What should a consumer do at the first sign of suspecting that they might be a victim of identity theft?

Joe Lester: Put a fraud alert on your credit report with each of the three main credit reporting agencies. Get a copy of your credit report to see if any new accounts have been opened in your name. If new accounts have been opened, place a dispute with the reporting agency and then contact the institution that issued the credit to tell them it is a fraud. File police reports in your town and in the town or towns where the fraud took place. Fight the false credit until it is cleared from your report. Do not stop until it is removed and your credit is restored. I would also recommend visiting the Federal Trade Commission’s ID theft Web site at “Phishing” threats are becoming more prevalent and sophisticated, yet many end-users do not understand how a “phishing” attack may lead directly to identity theft. Please give us an overview of this type of threat and what people can do to protect themselves.

Joe Lester: “Phishing” is Internet-based and is done via computer. Thieves send messages in an attempt to trick you into divulging personal information (credit card numbers, bank account information, Social Security number, etc.). The messages sent by phishers claim to be from a business or organization that you may do business with. For example, you could get a legitimate-looking message from your Internet service provider, bank or government agency. The message may ask you to “update,” “validate” or “confirm” your account information. Oftentimes these messages will threaten you with discontinuing service or some other consequence if you don’t respond. The messages direct you to a Web site that looks like a legitimate organization’s site but isn’t. It’s a fake Web site whose only purpose is to trick you into divulging your personal information so the thieves can steal your identity and run up bills or commit crimes in your name.

The first thing to be aware of is that the vast majority of companies will never send you a message asking you to verify personal, private information. If you do receive one of these messages, do not reply to it, do not click on any link in it, and do not call the telephone number shown in the message. Instead, find the actual number of the company in your file or wherever you keep it and call that number instead. Tell them about the message you received and ask them what you should do. You should also keep their firewalls, anti-virus programs and other computer protection up to date. offers a number of resources for the protection of consumers. How about an overview of these resources for our audience?

Joe Lester: At, we provide insight into what identity theft is and the methods used by identity thieves. We also provide guidance to consumers to help them avoid falling victim to this crime. Thank you very much for your time today, Joe.

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