Plenty Of Identity Theft Going Around

from the just-can't-avoid-it dept

The FTC has put out their list of what people were complaining to them about, and it seems that identity theft tops the list for the fourth straight year – with 42% of complaints concerning the crime (up from 40% the year before). What’s most interesting to me about this, though, is that despite all this identity theft, we still haven’t done much to prevent it. It still seems like most lawmakers and authorities don’t see it as a serious problem.

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Comments on “Plenty Of Identity Theft Going Around”

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LittleW0lf says:

The "real power" doesn't want this to change.

It still seems like most lawmakers and authorities don’t see it as a serious problem.

They don’t see it as a serious problem because those in power (the money institutions such as banks or credit card companies, whom hold the real power of the world,) do not see it as a serious problem. It doesn’t affect their bottom line, and as a result it costs more to fix the problem then leave it the way it is, despite the hidden costs to the users of their products. In order to do anything, you have to present your identity, and the presentation is based on easily forged authentication mechanisms.

I remember some person high up in American Express, I cannot remember who though, saying that they will not implement any security mechanism which adds 1 cent to a transaction. Such a mechanism that doesn’t add any money to a transaction is likely to be incidental and easily bypassed, so as long as they have this attitute, identity theft and fraud will remain easy to do.

Besides, there is a cash cow here…which they aren’t willing to give up. So long as identity theft exists, they will be able to push expensive identity theft insurance on their customers.

Chris Wuestefeld says:

Re: Don't blame the banks

It doesn’t affect their bottom line

This isn’t true at all. It happened to me twice last year, and neither time did it cost me a penny. The first was a check drawn on my account, which the bank ate. The second was a bogus credit card charge, which the bank detected before approving (don’t ask me how)

There’s significant expenses to both banks here:

  • The amount of the check that my bank ate
  • The cost of issuing me new account numbers, cards, etc.
  • The cost of developing and running the software that detected the credit card fraud

Whether this expense is greater than the cost of a real solution, I can’t say. But there’s definitely plenty of costs to the banks. So while it might be vogue to “follow the money”, you’ll need to look elsewhere in this case.

Oliver Wendell Jones (profile) says:

Re: Re: Don't blame the banks

Generally speaking, if you dispute a check, it’s not your bank that eats it, it’s whoever accepted the check.

Now, if someone walked into a branch of your bank with a phony/forged check and walked out with cash, then your bank ate the cost – they accepted the check.

If instead someone used the check to pay for gas/food/etc. then the loss goes back to the gas station/grocery/etc. that accepted the check.

LittleW0lf says:

Re: Re: Don't blame the banks

This isn’t true at all. It happened to me twice last year, and neither time did it cost me a penny.

Most banks turn over the costs to their customers (through fees) or to the merchant. Like I said, the banks will not change the system unless it costs more to ignore it than fix it.

You apparently were lucky, most people I know who are victims of identity theft loose thousands of dollars, not from the actual fraud, but in costs associated with cleaning up bad credit or lawyer costs to deal with collection agencies.

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