ID Theft Background
The following is an excerpt from FIPA’s 2005 study PIPEDA and
Identity Theft: Solutions for Protecting Canadians. PIPEDA is
the federal Personal Information Protection and Electronic
Documents Act.
In 1992, Beth Givens had started a small consumer complaints office in San Diego, California. Funded originally by fines levied on a telecommunications company that had not lived up to its terms of service, the office of Privacy Rights Clearinghouse was staffed by two people. Sometime in 1993, she started hearing from consumers about complaints that were different; instead of the usual credit card fraud from a lost or stolen wallet, consumers were complaining that someone had opened up accounts in their names, but they had not lost their cards or documents. She investigated, discovered a newspaper article that dubbed the phenomenon “Identity Theft”, and started using the term. The name has stuck, and the problem has become enormous. Not only has a large proportion of the Privacy Rights Clearinghouse’s business become assisting consumers to deal with identity theft, they have trained victims who have opened up their own consumer assistance centres (see http://www.idtheftcenter.org/index.shtml).
Governments and business were slow to respond to this new problem. Firstly, most victims did not find out their identities had been stolen until they applied for credit or tried to get a mortgage. Then they would discover they had a bad credit report, and often big debts they had not incurred. Proving you are not the one who has incurred a bill is a difficult job at the best of times. Companies were anxious to get their money, and not inclined to help victims once it had been established that the individual was not at fault. In the early years, it was very difficult just to get fraud alerts put on credit reports, to stop new accounts being opened by the thief. Thieves went from state to state, complicating prosecution. Although the Privacy Rights Clearing House early on had put out a number of excellent publications and fact sheets to educate consumers and help walk them through the process, the government had not moved to help and the public education was focussed on what consumers could do to protect themselves, not what business could do
to stop the spread of ID theft.
The problem has grown, aided by the Internet and the fact that so few individuals are ever
charged and convicted of ID theft. It has become the perfect non-violent yet highly lucrative crime. The Los Angeles and San Diego police report that fewer than 5% of cases that cross their desks are even investigated. Although the situation has been much less serious in Canada than in the United States over the past decade, we are catching up.
Phonebusters, the centre run by the Ontario Provincial Police, the RCMP, and the Competition bureau to combat telemarketing fraud, was set up in 1993. Recently, it has been receiving complaints about ID theft, and is now set up to collect statistics and assist victims by providing a 12 page victim statement to send to all creditors. The most recent statistics on their website show complaints rose from 8187 in 2002 to 13359 in 2003; this compares to 653,000 reports to the Federal Trade Commission reporting centre.
Both in the US and Canada, governments have stepped in to deal with the problem. The US Federal Trade Commission has set up an ID theft resource centre at http://www.consumer.gov/idtheft/. They provide victim affidavits for download, and have prepared guidance for businesses when they realize there has been a breach of the confidentiality of customer information. There is a model letter for notifying consumers of a breach, and a publication on ID theft and how to watch for it to send to individual consumers they notify. Action was required pursuant to the changes in the Fair Credit Reporting Legislation of 2003, and amended guidance takes effect May 2 2005.3 With all this activity, is there a need for more action? We think so, and the following chapters detail what could be done.
In May 1997, the principal investigator met Beth Givens, founder of the Privacy Rights Clearinghouse and one of the pioneers in the field of ID theft and of providing assistance to victims. Despite the fact that this was a growing problem with credit issuance at the time, Beth Givens was struggling to get the issue on the agenda of the US Government and Credit grantors. A brief look at this history, the slow development of regulatory response, and the abandonment if individual victims and their need to have some control over the use of their very identity helps put this whole project in some perspective.
PIPEDA and Identity Theft PDF
