Can I See
Some ID?
Consumers are still wary
of placing their personal information or credit card number on the
Net, and with good reason. Although we hear much about encryption and
security, breaches do happen. The problem has become so severe that
the FBI has set up a division to focus solely on identity theft and
high-tech fraud against financial institutions.
It has always been
possible for someone to go through a dumpster and find a discarded
credit card receiptóremember the old carbons? So, how come now
it's such a huge problem? Because now technology is doing the hard
work for the criminals. "Without the technology to manipulate and
transfer that data easily and inexpensively, we wouldn't have this
problem," according to Ed Howard, attorney for the Center for Law in
the Public Interest.
As proof, Trans Union
established a fraud victim hotline in January 1992. They received
about 300 complaints. Seven years later, in January 1998, 42,300
calls were received. According to Trans Union, about 14,000 of those
calls represented identity theft.
While some thieves are
still rummaging through the garbage or stealing wallets, some are
simply signing onto the Web and taking advantage of all it has to
offer. For example, a résumé or personal home page
probably lists a phone number, address, and a social security number.
All of these help a thief assume an identity. "Some families put
their whole family tree out there," said Beth Givens, executive
director of the Privacy Rights Clearinghouse. "You get dates of birth
and maiden names, which is pure gold to identity
thieves."
But, since perpetrators
face just one year in jail, maximum, the disincentive to steal is
minimal. And even if they are caught, many financial institutions
find it cheaper to write off the loss than to take the case to court,
so usually charges are dropped.
Which means, when the
case never gets to court, consumers may have their money refunded,
but they do not have the opportunity to clear their names in a court
of law. Therefore, the financial institution is the perceived victim,
rather than the individual. "That's where it unravels," said Werner
Raes, an expert on economic crimes at the Anaheim Police Department
in California. "Law enforcementówe're here. We're willing to
investigate the cases. We want to assist the publicÖbut we need
the cooperation and the buying in from the financial
industry."
Until the financial
industry is willing to admit that there is a problem, it doesn't look
like that cooperation will be any time soon.
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