Imagine getting that 6 AM phone call: “Your client database was breached. All their ID documents are exposed.” Your stomach drops. Thousands of passports, driver’s licenses, and identity cards - documents your clients trusted you to protect - are now in criminal hands.
By 9 AM, your phone is ringing non-stop. Angry clients demanding answers. Your lawyer warning about incoming lawsuits. Regulators already asking for breach reports. And you’re staring at potential privacy law fines that could cripple your business.
This isn’t a hypothetical scenario; it’s happening to businesses right now.
And the thing is, neither you nor your business benefit from keeping that data!
The Growing Risk of ID Document Exposure
Every year we see more and more cases of data leaks, many times accompanied by cases of identity theft. Behind these incidents are organized criminal networks executing calculated fraud schemes. The damage often surfaces years after the initial breach, with devastating consequences for both individuals and companies that can take years to resolve - if they can be resolved at all.
The Real Impact on Your Business
When clients trust you with their ID documents, they’re trusting you with their identities - quite literally. Once that trust is broken, there’s no going back. In markets where reputation is everything, a single breach can unravel decades of careful relationship building. Your existing clients will question their relationship with you, potential clients will choose your competitors, and partners may distance themselves to protect their own reputations.
But the damage goes beyond lost trust. When you store sensitive data like ID documents your business becomes a target. Cybercriminals know exactly which types of businesses typically store these documents, and criminal networks actively buy and aggregate stolen identity information. Even your physical security becomes more critical - basic security measures rarely stand up against determined attackers who know you’re storing valuable documents.
The consequences for your clients can be severe and long-lasting. Beyond fraudulent bank accounts and loans, criminals can commit various crimes under their identity, compromise government benefits, and access healthcare services. Your clients might spend years trying to prove their innocence and restore their identities.
Privacy Laws: Protection with Teeth
The regulatory landscape has evolved to match these risks. If you’re doing business internationally, you’re navigating a complex web of privacy laws:
- The European Union’s GDPR can fine you up to €20M or 4% of global revenue
- Singapore’s PDPA can fine organizations up to 10% of annual turnover or S$1 million, whichever is higher
- Swiss Privacy Laws include personal criminal liability for executives
- California’s privacy laws allow individuals to take direct legal action
What many businesses don’t realize is that these laws follow your clients, not your business location. If you have clients in these jurisdictions, you must comply with their local privacy laws - regardless of where your company is based.
Please note
While this isn’t legal advice and laws change constantly, the message from regulators is crystal clear: collect as little personal data as possible, and if you must collect it, you better keep it safe.
Common Excuses (And Why They Don’t Work)
“We might need it later”
Every ID document you keep “just in case” is a liability you’re carrying for an imaginary future benefit. Think about it: by the time you “need it later,” it’s probably outdated anyway. If you really need it in the future, you can ask for it then.
“It’s just a copy”
That ‘just a copy’ you stored three years ago is now sitting in your email, your backups, your employee’s cloud storage, and who knows where else. Each copy is a liability, and you’re responsible for every single one of them. Often, a leaked copy is enough to do much more damange than you can imagine, if not through fraud, through damange to your reputation.
A common example of how this data spreads in the organization.
“Our storage is secure”
Every company that’s ever been breached thinks their storage is secure, until they are proven wrong. Every system can be breached. The only truly secure data is data you don’t have. Plus, most breaches don’t come from dramatic hacks - they come from simple mistakes like misconfigurations, employee errors or, believe it or not, internal attacks.
“We’ve always done it this way”
Past practices are your biggest liability in today’s privacy landscape. The rules have changed, the risks have multiplied, and the consequences are severe. What worked five years ago could bankrupt you today. It’s time to adapt or face the consequences.
Protecting Your Business: Prevention Over Cure
The best protection isn’t better security - it’s collecting less in the first place. Every ID document you store is another risk. Before asking for any ID, ask yourself: Do I legally need this? If I need to verify identity, do I need to keep a copy? There are often better ways to verify identity without keeping sensitive documents indefinitely.
Here’s where most companies can start cleaning up their act:
- Audit where your company stores ID documents (including email attachments!)
- List every process that requests client IDs
- Check the legal requirement for each collection point
- Document retention periods for mandatory collections
- Review employee access to stored documents
- Implement immediate deletion for unnecessary documents
Look, sometimes you have no choice. Anti-money laundering rules or other regulations might require you to collect IDs. When that happens, you need a plan: Know exactly what law requires it, collect only what you must, control who can access it, set deletion dates, and regularly check you’re following your own rules.
Protecting Yourself as a Decision Maker
Your personal identity documents are just as valuable as your clients’. Here’s how to protect yourself:
- Ask for the legal justification before providing your ID. Many services request it out of habit rather than necessity
- When possible, sign documents in person rather than sending ID copies
- Ensure your personal data is deleted once its intended use is fulfilled
- Avoid sharing identity documents over email, messaging apps, or other unsecured channels
- If you must share an ID, use secure transmission methods and request immediate deletion confirmation
Remember: You have the right to question ID requests and seek alternatives. The same regulations that protect your clients also protect you - use them.
Taking Action
The time to act is now, before you receive that 6 AM phone call. Start by auditing the kind of personal data your company stores - you might be surprised by what you find. Question every point where you collect ID documents, and unless legally required, implement immediate deletion policies.
Remember: The most secure way to handle sensitive documents is to avoid collecting them in the first place. Every ID document you store isn’t just a liability - it’s a crisis waiting to happen. One that could cost you your reputation, your clients’ trust, and maybe even your business.