Thursday, April 28, 2005

Industry and government must respond to the identity theft threat

Industry and government are responding to the identity theft threat, but the approach varies from state to state and business to business.

Industry and government are responding to the identity theft threat, but their approaches vary from state to state and business to business. It is imperative for government and industry to develop a unified front against identity theft.

On April 21, United Press International’s Al Swanson provided an overview of the current and pending safeguards government has against identity theft.

We need a national policy. The messages from all corners should be in agreement. Identity thieves need to know that industry cares about its customers and that government has industry’s support in developing punishments to fit this crime.

Senator Diane Feinstein (D-Calif.) has proposed legislation that would require any company nationwide to inform potential victims of identity theft as soon as it learns of a security breach. California is the only state to demand such action from industry.

I applaud Sen. Feinstein’s efforts; however, legislation is reactive. Putting systems in place to stop identity theft is proactive. There shouldn’t be an opportunity for industry to notify consumers if identity theft is stopped in the first place.

Most of the action being taken by politicians constitutes ineffective responses to the crime. It’s like eating fast food, gaining weight, clogging your arteries, and then drinking diet cola. It makes no sense.

As explained [free registration required to view article] by Knight Ridder’s Matthai Chakko Kuruvila on April 13, only a handful of states offer -- or soon will -- a “credit freeze” option for consumers. California, again, is the pioneer. Any consumer there can prevent new accounts from opening in her name. To apply for a new account, she must manually “unfreeze” her credit -- even for herself.

The credit freeze is the single most useful tool consumers can use to foil identity thieves. Every state in the nation should offer this option.

Legislators should also push for proper authentication via biometric security solutions. Many financial accounts don’t use Social Security Numbers for authentication. A freeze won’t stop identity theft here, and criminals can continue to commit crimes under the names of victims, too. Authentication is the only solution.

Industry has also responded. A number of companies are assisting organizations that offer free or affordable help to victims of identity theft.

On April 18, InformationWeek’s Steven Marlin reported that a group of financial institutions called the Financial Services Roundtable “has made permanent its Identity Theft Assistance Center.” According to Marlin’s article, victims of identity theft receive free assistance there. Banks fund the operation, and Intersections Inc., “a provider of bank-branded ID-theft-protection services,” runs it.

Every victim of identity theft deserves access to free assistance. All too often, victims are saddled with the arduous task of fixing their credit histories themselves. This costs money and can make them feel like they’re guilty until proven innocent.

In an April 13 press release, the Calif.-based Identity Theft Resource Center (ITRC) announced that ChoicePoint Inc. has committed to fund an expansion of the ITRC’s programs for victims of identity theft.

Any help from industry is welcome, but ChoicePoint is also part of the problem. Identity thieves are criminals but not solely to blame. Those who pursue legal profits by buying and selling people’s identities assume a heavy responsibility indeed. It will take a noticeable change in business practices to halt the barrage of identity theft.


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