Identity Theft By: Brian Paulsen
How common is identity theft? According to the US Department of Justice, 10% of people over the age of 16 reported being victims of identity theft in 2016 (Harrell).
Who is most susceptible? Multiple reports have found that people over 65 are underrepresented as victims of identity theft (Copes et al.).
Who is most susceptible? Multiple reports have found that people over 65 are underrepresented as victims of identity theft (Copes et al.) The most susceptible are: - High income earners - Young people (Harrell)
Income and Identity Theft 14% of people between high income earners experienced identity theft compared with 6% of people low income earners (Harrell).
Age and Identity Theft 11% of people between ages 25 and 34 experienced identity theft compared with 8% of people over 65 (Harrell).
Formal Definition The Department of Justice says that identity theft is a type of crime where a person wrongfully obtains and uses someone else’s personal data that involves fraud or deception (“Identity Theft”).
Identity Theft Types Type Number of Reports Credit Card Fraud 157,688 Employment or Tax-Related Fraud 67,499 Phone or Utilities Fraud 63,563 Bank Fraud 52,529 Loan or Lease Fraud 51,856 Government Documents or Benefits Fraud 24,854 Other Identity Theft 122,499 (“Consumer Sentinel Network”)
Credit Card Fraud - Credit card theft is the most common kind (“Consumer Sentinel Network”) - There are two kinds of credit card fraud: - Application Fraud: Perpetrators get issued a new card saying they are someone else - Behavioral Fraud: Perpetrators steal a card that has already been issued (Jha) - Many companies use AI to detect fraud - Companies process large amount of customer shopping data
Ethics of Collecting Data to Prevent Fraud: Virtue Ethics - They are saving customers’ time by dealing with fraud before customers even know about it - It can be seen as a violation of privacy - There are over 280 million credit card payments per day (“Federal Reserve Payments Study”) - Companies wouldn’t be able to deal with that many - While collecting the data can be seen as a violation of privacy, it is okay because there is no other way to fix the problem
Preventing Credit Card Theft - Don’t give your credit card information to people unless you have to - Keep online accounts safe using good password creation methods - Be conscious of receipts - Review billing statements
What can you do if you get your identity stolen? According to the Department of Justice, you can - Call the companies where the crime occurred - Place a fraud alert - Check credit reports - Report to the FTC - File a report with the local police (“Identity Theft”)
How hard is it to resolve? 55% of victims who resolved their credit problem did so in a day or less (Harrell).
Ethics of Identity Theft Who is responsible when there is a breach, and how should they be held responsible?
Equifax Breach - Nearly 150 million people had their social security numbers stolen (Leonhardt) - Equifax knew about the flaw two months before hackers first attacked (Wattles) - The former CEO says an individual inside the company did not heed warnings and implement software fixes (Bernard)
Equifax: Social Contract Perspective - Implicate contract between customers and Equifax - Equifax would make a good-faith to protect customer details - Equifax ignored signs that they were vulnerable - Equifax is responsible
Equifax Result - Equifax forced to pay out $700 million (Leonhardt) - $425 million for consumer compensation - $175 million in civil penalties to states - $100 million fine to Consumer Financial protection Bureau - Equifax forced to provide credit monitoring for affected parties (Leonhardt) - Equifax CEO resigned (Bernard)
Identity Theft and COVID-19 - People are using the pandemic to commit credit card fraud - People are fearful, which causes rash decision making - The FTC recommends - Watch for offers for vaccine and testing kits - Don’t respond to emails and texts about checks from the government - Make sure charities you are donating to are legitimate (“Coronavirus Scams”)
Two Biggest Takeaways - Identity theft is not most common among young, high-earning individuals - The most common kind of identity theft is credit card fraud
Works Cited Bernard, Tara Siegel, and Stacy Cowley. “Equifax Breach Caused by Lone Employee's Error, Former C.E.O. Says.” The New York Times , The New York Times, 3 Oct. 2017, www.nytimes.com/2017/10/03/business/equifax-congress-data-breach.html?searchResultPosition=3. “Consumer Sentinel Network.” Federal Trade Commission , Feb. 2019, www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2018/consumer_sentinel_network_data_book_2018_0.pdf. Copes, Heith, et al. “Differentiating Identity Theft: An Exploratory Study of Victims Using a National Victimization Survey.” Journal of Criminal Justice , Pergamon, 10 Aug. 2010, www.sciencedirect.com/science/article/pii/S0047235210001583. “Coronavirus Scams: What the FTC Is Doing.” Consumer Information , 6 Apr. 2020, www.consumer.ftc.gov/features/coronavirus-scams-what-ftc-doing. “The Federal Reserve Payments Study: 2017 Annual Supplement.” Federal Reserve , 25 Jan. 2018, www.federalreserve.gov/paymentsystems/2017-December-The-Federal-Reserve-Payments-Study.htm. Harrell, Erika. “Victims of Identity Theft, 2016.” Bureau of Justice Statistics , Jan. 2019, doi:https://www.bjs.gov/content/pub/pdf/vit16.pdf. “Identity Theft.” The United States Department of Justice , 7 Feb. 2017, www.justice.gov/criminal-fraud/identity-theft/identity-theft-and-identity-fraud. Jha, Sanjeev, and Christopher J Westland. “A Descriptive Study of Credit Card Fraud Pattern.” Global Business Review , vol. 14, no. 3, 2013, pp. 373–384. Leonhardt, Megan. “Equifax to Pay $700 Million for Massive Data Breach. Here's What You Need to Know about Getting a Cut.” CNBC , CNBC, 23 July 2019, www.cnbc.com/2019/07/22/what-you-need-to-know-equifax-data-breach-700-million-settlement.html. Wattles, Jackie, and Selena Larson. “How the Equifax Data Breach Happened: What We Know Now.” CNNMoney , Cable News Network, 16 Sept. 2017, money.cnn.com/2017/09/16/technology/equifax-breach-security-hole/index.html.
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