Chapell & Associates

Wednesday, June 28, 2006

ID Theft: More Hype Than Harm

Businessweek - July 3, 2006 - Law enforcement officials say the criminals tend not to follow through after stealing personal data The headlines are enough to make you swear off eBay and lock your wallet in a safe-deposit box. Supposedly trustworthy companies like LexisNexis, Time Warner, ChoicePoint, and Wells Fargo, admit that the records of their customers or employees have fallen into the wrong hands. In one case, thieves break into a Midwest office of American International Group and steal a computer server containing personal data on 930,000 employees of companies seeking medical coverage. And in the Big Kahuna of identity theft, a laptop containing Social Security numbers and other sensitive information for nearly 29 million active and former military personnel is stolen from a Veterans' Affairs Dept. staffer's home in suburban Maryland.

The Chapell View
Ahhh... the power of statistics and hype. It's easy to pull headlines with statistics such as "1 in 4 American's has had their digital data exposed in the past 18 months," and "X% of American's has had spyware on their computer." While there's definately a good deal of truth to the hyperbole, I don't think anyone really knows the broader implications of either of those stats. The police (in many cases) are not particularly advanced in spotting and investigating these types of crimes.

While I don't think that ID theft is going to cause a financial crises, these are certainly people in this country whose lives have been absolutely torn apart by ID theft. And I would hate to think that some old-school direct-marketer (many of whom still really don't get it when it comes to privacy and security) would look at this story and think, "gee, maybe this isn't such a big deal."
"the Communist Party has infiltrated all levels of the U.S. Govt.

Until we fully understand how to reliably detect and report these types of breaches (we're getting close) and understand their full impact upon victims (and not just in terms of credit card fraud), we can't make a prediction as to their relative impact.
posted by Alan on Wednesday, June 28, 2006

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