WHAT DOES THE BERNIE MADOFF SCANDAL HAVE TO DO WITH ID THEFT? MORE THAN YOU THINK
Bernie Madoff awoke one morning in his East Side apartment to face two FBI agents. Special Agent Theodore Cacioppi asked him: “We're here to find out if there's an innocent explanation," referring to reports his investment firm had stolen billions from its customers. Madoff replied: “There is no innocent explanation.” And that is one of the comparisons to identity theft; the only reasoning in either case is the greed of an individual that overrides all common sense and decency.
When the tanking economy prompted many of Madoff’s investors—which included big names like real-estate magnate Mortimer Zuckerman, Nobel laureate Elie Wiesel, Sen. Frank Lautenberg, Hollywood director Steven Spielberg and Zsa Zsa Gabor, some, close friends—to pull out their money, the fraud was finally discovered. Employees actually went to his apartment where Madoff admitted the fraud. His two sons, also among the shocked employees, called the Securities and Exchange Commission, which tipped off the FBI, according to a New York Daily News article.
Thus, the second comparison to ID theft. According to Javelin Strategy & Research, almost half of identity fraud is perpetrated by friends, neighbors, employees, family members or relatives.
Bernie Madoff is charged with the biggest Ponzi scheme ever, costing his victims $50 billion that many experts believe is a complete loss. Coincidentally, almost $50 billion was lost to identity theft in the last Javelin survey, this through a network of crooks that come across almost as sophisticated as Madoff. The point here is that it would be near-impossible to protect against an investment conspiracy like Madoff’s, since years of reputation and friendship were used to pull off the scam. Of course, questioning the spectacular results being experienced in such a down economy would have helped.
On the other hand, it is possible to prevent identity theft by giving consumers control over their names and personal data, and compensating them when it is sold to encourage taking over this new responsibility.
In the meantime, I thought we might start a “Buddy System” to help friends, relatives, even strangers if they will listen, to guard their private information from the bad guys. You remember summer camps when you went swimming and everyone was assigned a buddy for both of you to watch each other. Of course, today’s breast cancer buddy system is one of the most prominent and successful.
As a privacy advocate who lives the part every day, I am amazed at the number of people I run into who either do not understand the basics of protecting their sensitive data, or are of the group that thinks it could never happen to them. In other words, it is at the bottom of the priority list, and is likely to stay there until public recognition is aroused. Perhaps those of us who understand the problem can pass the word around of just how important it is to safeguard our private information.
Just tell them if they don’t, and their identity is stolen, it could cost them $5,720 and at least 25 hours to take back their credit. That’s the facts, folks.