CreditLock.com

By now, we all know that Identity Theft is the crime of the decade, claiming about 9 million victims and causing close to $50 Billion in damages every year. What is the reason for the surge in Identity Theft? In a recent informal poll/survey published at www.CreditLock.com , visitors were asked: "What do you Believe is Primarily Responsible for the Spread of Identity Theft?" The survey was not interested in its visitors' opinion of  who is responsible, but it was rather interested in its visitors' opinion of what is responsible. Such distinction is an important one; the poll/survey results can be used to suggest solutions, as opposed to laying blame.

The results of the poll/survey were mixed, and suggested that respondents felt there were several factors causing such surge. 27% of respondents cited General Loss of Privacy Rights, 27% cited Inadequate Government Action, 18% cited Lax Protection by Merchants, 18% cited Globalization and International Cyber Crime, 4% cited General Increase of Crime, and 4% cited Other reasons. Although the survey is informal, and its sample size is small, such results were in contrast to previous similar surveys published at the website, in which respondents typically overwhelmingly chose a certain response for the posed question. In this case, there is significance to all first four reasons listed, comprising more than 90% of the results. The perception of the General Increase in Crime, which only received 4%, is consistent with the fact that during the past decade, actual crime data suggests that there has been a general decline in crime (although it is debatable as to whether Identity Theft is accurately captured in such hard data).

General Loss of Privacy Rights

In a world dominated by a public urgency for Security, it is not surprising that respondents feel a general loss of Privacy Rights. Such topic has been discussed in details, from a philosophical and practical perspective, in a previous article titled: "Identity Theft Protection challenge: Balancing Security and Privacy without Increasing Risk of ID Theft" In order to overcome such hurdle, society must reach a natural balance of Security and Privacy, whereby Privacy Rights are not compromised. Such balance must be "natural", emanating from a generally accepted public sense of justice, honesty and integrity, where prominent public figures (with the exposure to influence the masses) lead by example. If society tries to create such balance in a non-natural way, then it may be very difficult to alter the general perception of a general loss of privacy.

Inadequate Government Action

With 9 Million Identity Theft victims and about $50 Billion in damages annually, it is not surprising that respondents feel that the government's action is inadequate. Consumers simply believe that if the government's actions were adequate, there wouldn't be such a major crime. It is unfortunate that the government may not get credit for some of its initiatives. Such initiatives include the formation of the President's Identity Theft Task Force. In addition, States have passed individual Credit Freeze laws.

Although such actions are positive, they seem to be slow to evolve. That could explain the public's perception for the need of more government action. Although Credit Freeze laws were first passed by California in 2003, there are still many states with no such effective laws, and no Federal Law. It is true that now there are many states with effective credit freeze laws (see http://www.creditlock.com/creditlockdownpro.html ) , however it has taken 4 years, and many states, such as many in the Deep South, are still lagging.

To overcome such hurdle, it is time for a all states to pass Credit Freeze laws, allowing consumers the ability to lock down access to their credit report. In addition, it is time for an effective Federal Credit Freeze law, in order to streamline the requirements and associated costs. Also, There needs to be better protection of individuals' sensitive data used in various government departments. The rampant unprotected use of social security numbers, the regular occurrence of hard drive and laptop theft, and the occasional publishing of sensitive data on the internet, must be addressed and mitigated. The government is an expert at keeping classified documents secret. Hence, the government certainly has the know-how of protecting sensitive information; maybe citizens' sensitive information needs to be treated somewhat as classified data...

Lax Data Protection by Merchants

The recent data breaches at major merchants, such as TJ Max, explain why respondents also fault lax data protection by merchants. Such aspect was discussed in details in an article published June 5, 2007, "Identity Theft and Credit Card Fraud Shake Consumer Confidence in Merchants" This can be addressed if additional merchants start complying with the Payment Card Industry (PCI) Data Security Standards. In addition, merchants need to consider collecting the least amount of sensitive information possible. As an example, one of our analysts recently attempted to pay for a Club's membership fee over the internet. To his surprise, he was asked to provide his social security number (supposedly for "identification purposes"). As a result, he simply mailed in a check...

Globalization and International Cyber Crime

During the past several years, many consumers have received substantial Phishing communications, which seem to have originated in Eastern Europe and elsewhere. Many consumers have also received the "Nigerian" scams, the "Iraq" scams, the "Spanish Lottery" scams, etc... In an article we published on April 25, 2007, "Identity Theft Crackdown: Strengths, Weaknesses and Red Flags for identity Theft Task Force Strategic Plan", we noted that there seems to be a good effort to tackle International Cyber crime by coordinating with foreign governments. However, we also noted that