Combating Identity Theft
April 11, 2003
Identity theft cost banks and brokers $3.4 billion last year, according to Financial Insights, an industry research firm. The tab could top $8.2 billion by 2006 if steps aren't taken.
Alarmed, the Bush Administration is preparing measures to combat the menace and make it easier for victims to restore their credit records. Wayne A. Abernathy, Assistant Treasury Secretary for Financial Institutions is mulling a 12-point plan that includes:
- Authorizing bank examiners to audit financial firms' procedures for dealing with "red flags" on credit histories that indicate possible fraud, such as recent address changes.
- Stiffer penalties, including longer jail time, for those convicted of identity theft, and letting victims and financial institutions sue perpetrators for damages.
- Making it easier for victims to gather information about fraud committed falsely by others in their name.
Abernathy also wants to steer the debate over financial privacy away from the hot-button issue of consumers' rights to choose how their information is used. To consumer advocates, the surprise is that the Administration is backing a privacy measure at all.
Source: Amy Borrus, "To Catch an Identity Thief: Washington's plan may suit creditors better than consumers," March 31, 2003, BusinessWeek.
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