New York Times on Identity Theft.
I got some really good quotes in this New York Times article on identity theft:
Which is why I wish William Proxmire were still on the
case. What we need right now is someone in power who can put the burden
for this problem right where it belongs: on the financial and other
institutions who collect this data. Let's face it: by the time even the
most vigilant consumer discovers his information has been used
fraudulently, it's already too late. “When people ask me what can the
average person do to stop identity theft, I say, 'nothing,'” said Bruce
Schneier, the chief technology officer of Counterpane Internet
Security. “This data is held by third parties and they have no impetus
to fix it.”
Mr. Schneier, though, has a solution that is positively Proxmirian
in its elegance and simplicity. Most of the bills that have been filed
in Congress to deal with identity fraud are filled with specific
requirements for banks and other institutions: encrypt this; safeguard
that; strengthen this firewall.
Mr. Schneier says forget about all that. Instead, do what Congress
did in the 1970's — just put the burden on the financial industry. “If
we're ever going to manage the risks and effects of electronic
impersonation,” he wrote recently on CNET (and also in his blog), “we
must concentrate on preventing and detecting fraudulent transactions.”
And the only way to do that, he added, is by making the financial
institutions liable for fraudulent transactions.
“I think business ingenuity is top notch,” Mr. Schneier said in an
interview. “And I think if you make it their problem, they will solve
Yes, he acknowledged, letting consumers off the hook might cause
them to be less vigilant. But that is exactly what Senator Proxmire did
and to great effect. Forcing the financial institutions to bear the
entire burden will cause them to tighten up their procedures until the
fraud is under control. Maybe they will invest in complex software. But
maybe they'll take simpler measures as well, like making it a little
less easy than it is today to obtain a credit card. Best of all, once
people see these measures take effect — and realize that someone else
is responsible for fixing the problems — their fear will abate.
As Senator Proxmire understood a long time ago, fear is the great
enemy of commerce. Maybe this time, the banks will finally understand
that as well.