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Making Identity Theft Victim Compensation Effective
May 9, 2007
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Individuals who become victims of Identity Theft often sustain substantial financial, emotional and even civil rights losses. A video available at the home page of www.creditlock.com, provided courtesy of the FTC, illustrates some ordeals suffered by victims of Identity Theft.
When a criminal steals the identity of an innocent victim, and commits a crime in such person's name, the innocent victim could find himself falsely accused, charged, and possibly detained, until the matter is cleared. In some cases, even after a victim clears himself, his name may remain listed as a known alias for the criminal. That could entail fingerprinting, and additional loss of time, every time the victim is falsely suspected of being the criminal.
In other cases, victims incur thousands of dollars of direct financial losses, and spend hundreds of hours to clear their credit reports, including loans fraudulently obtained by the criminals in the names of their victims. Given such severity of the crime of Identity Theft, Identity Theft victim compensation is a must, and is fully supported by us as well as millions of concerned consumers.
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 | In order to make Identity Theft Victim Compensation effective, several aspects must be carefully examined. Compensation would be derived from three general sources: A- Identity Theft Insurance B- Credit Fraud Insurance C- Government sponsored compensation. Regardless of the source of such compensation, and in order to make such victim compensation most effective, the effects of Identity Theft compensation must also be taken into consideration.
The benefits of Identity Theft victim compensation to real victims is evident. Unfortunately, as illustrated in a previous article published at www.creditlock.com, "Compensating Identity Theft Victims Could Inflate Identity Theft Reports", such compensation could result in an increase in Identity Theft Reports. As most readers would realize, an increase in "Identity Theft Reports," does not mean an increase in Identity Theft. As the article clearly illustrates, reports would increase due to fraudulent reports filed by criminals in order to collect victim compensation. Furthermore, "Reports" would increase due to the filing of such reports by real victims who in the past would not have filed a report, but now may be incentivized in doing so in order to be compensated. In both such scenarios, it is clear that real Identity Theft occurrences may not increase, but actual "reporting" of such occurrences may increase.
An increase in Identity Theft Reporting, if un-filtered from the above two factors, could have adverse effects. First, as in the general insurance industry, Claims Fraud will result in an increase in cost to society as a whole. Second, the negative publicity generated from an increase in un-filtered Identity Theft Reports could "disincentivize" politicians from aggressively pursuing Identity Theft Victim Compensation. That should not be surprising; when individuals lobby for a cause, they want the positive results to be clearly measurable, as opposed to being diluted by negative side effects.
Should these side effects cause anyone to conclude that Identity Theft Victim Compensation is not desirable? Absolutely not. On the contrary, by taking such side effects into consideration, and bringing such issues into the open,
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appropriate measures could be employed in order to
possibly offset such factors. For example, when data is published for
annual estimates of Identity Theft victims, if such estimates are based
on Reports filed by victims, publishers of such studies need to filter
out the above two factors. In addition, any government program adopted
to compensate victims for either financial losses or value of time,
must make certain that such compensation is claimed by Real victims,
without subjecting such victims to a grueling verification process
that may cause them to give up seeking such compensation. In essence,
Identity Theft Victim Compensation must be made effective by channeling
funds allocated to such cause to the Real victims.
Identity Theft Victim Compensation can also become more effective by clarifying the fine print clauses in Identity Theft Insurance policies. There seems to be a general perception that if one was to examine the fine print in some of those policies, it is highly unlikely that a victim would actually be compensated. It must be clarified whether such perception is a myth or a reality. If Identity Theft Insurance companies were required to publish total Identity Theft Insurance payouts, relative to amount of claims, and advertised cover of insurance, such perceptions could be verified.
As for Credit Fraud Insurance, existing laws protect consumers against being responsible for fraudulent charges incurred on their credit cards. For example, all credit card companies allow consumers to dispute charges in case such charges are fraudulent. In addition, upon properly reporting a stolen credit card, consumers are not responsible for any charges made by criminals. Similarly, consumers are not responsible for loans fraudulently obtained in a victim's name. Unfortunately, it is sometimes quite an ordeal for victims to prove that such fraudulent loans were taken by criminals. Identity Theft Victim compensation can be made more effective by establishing a standard and clear mechanism for determining whether a loan has been fraudulently obtained or not.
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Undoubtedly, there are additional measures to make Identity Theft Victim Compensation effective. Addressing any such measures by bringing related issues into the public, and dealing with both negative and positive consequences, could further the goal of making certain such compensation is channeled to its proper recipients. |
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