The Presidential Federal Task Force on Identity Theft recently issued its strategic plan to combat identity theft. The recommendations and guidelines suggested, if followed, are definitely a good start to protecting consumers information because they put controls on the use of SSN numbers as universal identifiers (in the public sector) and establish some national standards for responding to breaches of sensitive data without hindering some State’s stricter protection laws.
The report is definitely worth reading when you can find the time. Weaved throughout are victim’s stories from both a business and consumer perspective that will open your eyes to just how damaging identity theft can be. This example shows how identity theft impacts more than your credit history:
When purchasing advertising space in a trade magazine in 2002, a Colorado man wrote his birth date and Social Security number on the payment check. The salesman who received the check then used this information to obtain surgery in the victim’s name. Two years later, the victim received a collection notice demanding payment of over $40,000 for the surgery performed on the identity thief. In addition to the damage this caused to his credit rating, the thief’s medical information was added to the victim’s medical records.
Also included are accounts where businesses were able to prevent significant losses by enacting fraud prevention and identity authentication solutions.
When a major consumer lending institution encountered a problem when the loss ratio on many of its loans —including mortgages and consumer loans—became excessively high due to fraud, the bank hired a leading provider of fraud prevention products to authenticate potential customers during the application process prior to extending credit. The result was immediate: two million dollars of confirmed fraud losses were averted within the first six months of implementation.