ID THEFT VICTIMS USUALLY INDEMNIFIED FINANCIALLY, BUT NOT IN THE TRAUMA

In an article by Andrew Burger in the E-Commerce Times (see Part 1, Part 2), and reported in TechnewsWorld, a senior researcher from security software firm, RSA, indicates the consumer is usually indemnified from the loss of their money in the banking and electronic commerce industries, but not the trauma of cleaning up the damage to their credit. In the latest report from Javelin Strategy and Research, the individual is still stuck with an average loss of 25 hours of their time, and the cost of attorney fees. One report on privacy sites the impact of identity theft being comparable to victims of violent crime. Burger quotes USA Today as reporting that personal ID theft more than tripled in 2007; Identity Theft Resource Center (ITRC) says the increase was four-fold. Some other facts in the article are the U.S. Secret Service’s estimate that the average identity theft case they closed from 2000 to 2006 was $31,000. In 2004, consumers could expect to recover 80 percent of the money lost, dropping to 54 percent in 2006. Also confirmed was the fact that loss of your Social Security number is still the most important factor in ID thieves stealing your identity. ITRC quotes some of the aftermath of experiencing an identity theft with effects including increased insurance and credit card fees, hard to find a job, higher interest rates, and the battle with collection agencies and credit card companies that refuse to honor your evidence of the crime. Another alert in this piece was a reminder that family members and friends commit over 40 percent of the fraud. And dumpster diving still accounts for a significant amount of your sensitive data ending up in the hands of the crooks, but the computers are the “enabling” technology that neatly ties it all together. In Part 2 of the article, there’s a startling revelation from The Wall Street Journal that in 2006, as the result of a data breach, the average company lost 12 percent of its stock price value. You would think that would move most to fix the situation, but, as stated above, incidents of the crime increased 400 percent in 2007 over the prior year. According to Randy Abrams of security firm, ESET, failing to encrypt stored data is “one of the most egregious errors” committed by business and government. In another interesting detail, in 2005, 20 percent of customers in the U.S. that suffered a data breach stopped doing business with the company responsible. Reason number two that business and government should have taken action in 2006 and 2007 to remedy the situation. Burger ends Part 2 with another statement from Abrams: "As long as personal information is a commodity that does not belong to the consumer, as is the case in the U.S. -- in stark contrast to some European countries -- identity theft will be facilitated. The nature of the ownership of personal information is an enabler of identity theft that is sanctioned by the U.S. government through antiprivacy legislation." Not sure about ownership, but the consumer should be given control over their names and personal data now, and they should be compensated when it is sold.