Reality Check on ID Theft

[R. A. Hettinga]

http://www.techcentralstation.com/1051/printer.jsp?CID=1051-032102A

Reality Check on ID Theft
By Sonia Arrison	03/21/2002

Identity theft is a serious concern, but despite calls from regulation
advocates, new privacy laws are not the answer to this insidious crime. As
a new report shows, consumer awareness and better enforcement of existing
laws are the ways to solve this problem.

Advocacy groups such as the San Diego-based Privacy Rights Clearinghouse
estimate that the number of ID thefts - when someone co-opts another
person's identity to commit theft or fraud - is around 750,000 a year. But
numbers from a recent General Accounting Office (GAO) report tell a
different story.

For example, between November 1999 and September 2001, the Federal Trade
Commission's (FTC) Identity Theft Data Clearinghouse only logged a total of
94,100 complaints, a number similar to data from consumer reporting
agencies. This means that the chances of being a victim are less than 0.03
percent - about the same as being hit by a vehicle while crossing the
street.

Responding to concerns that ID theft is increasing, Congress passed the
Identity Theft and Assumption Deterrence Act in 1998. There are also
numerous state laws targeting the crime. With all this legislation, it's
curious that ID theft appears to be increasing.

Many people blame the Internet, because it makes the collection and
transfer of personal information easier. But not only was ID theft
happening long before the Internet became popular, it's also easier for
thieves to obtain data from the trash bin than by breaking into a
business's encrypted online database. This explains why the tips for
avoiding ID theft are mostly low-tech and based on common sense.

One of the best defenses against ID theft is a paper shredder. Destroying
garbage that has tax information (and therefore your social security
number), credit card numbers, and other personal information is a good
idea. Also, don't give your credit card, bank account, or social security
numbers to anyone without knowing who they are and why they want them.

Another way to prevent crooks from snatching your identity is to install a
lockable mailbox - this will prevent thieves from taking your personal
documents before you even see them. Many victims of ID theft do not find
out until months later that their information has been co-opted.

Since businesses collect information about consumers, some regulation
advocates have called for stronger laws governing the collection and use of
that data. But that inaccurately assumes that businesses routinely leak
information. It also threatens consumer convenience and the free flow of
commerce. To meet demand and offer services at the lowest cost, businesses
need information about their customers. So what's the answer?

The key to stopping ID theft may be found by looking at the enforcement
data in the recent GAO report. For instance, in the years 1999 and 2000,
the FBI logged zero convictions for ID theft crimes involving the
fraudulent use of credit cards. This is in comparison to 1996, when they
managed five convictions, and two in both 1997 and 1998.

The Secret Service, another government agency charged with investigating
these crimes, told the GAO that it has "moved away from investigating
street crime level offenders" to targeting large-scale operations. And
local police departments often encounter jurisdictional problems in chasing
ID bandits, which means that even with all the laws against ID theft, few
criminals are brought to justice.

As long as thieves can easily get away with ID crimes, they will continue
to do so, no matter how many laws are on the books. Fortunately, the FTC
has started encouraging law-enforcement over law-creation. But not everyone
has seen the light. California Attorney General Bill Lockyer, co-chair of
the National Association of Attorneys General Consumer Protection
Committee, continues to push for more restrictive and costly privacy laws.
That quest comes despite the lack of data showing that the marketing
departments of businesses are responsible for ID theft.

Policymakers and advocates need to recognize that cutting off a business's
ability to market to their customers is not the way to solve the ID theft
issue. A better way to fix the problem is to give police the ability and
incentive to enforce existing laws and to educate consumers on how they can
better protect themselves. That way, consumers will be safe as they shop
both on and offline.

Sonia Arrison is director of the Center for Technology Studies at the
California-based Pacific Research Institute. She can be reached at
sarrison at pacificresearch.org .

Copyright © 2002 Tech Central Station - www.techcentralstation.com

-- 
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R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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