Identity Theft

Posted on Friday 23 December 2011

I recently saw an ad on TV for a company that says they can protect you from “identity theft”. Identity, by definition, can not be stolen.

Identity can be defined as: the condition of being oneself or itself, and not another.

While someone can pretend to be you…they can not actually be you. Granted, if they decided to murder you and take your place in your life, they could “steal” your identity, but that isn’t very likely to happen.

Selling a subscription-based protection service for preventing “identity theft” is a pretty nice scam that is only possible because the financial industry and government don’t really hold the true parties responsible in this type of crime. What this crime really should be called is fraud, because that is what it is. It is someone pretending to be someone they are not for financial gain…fraud, plain and simple.

If the government and financial services industry held the financial institutions responsible for any fraudulent accounts they approve, then there would be far less “identity theft”. One simple way to prevent much of the “identity theft” in this country would be to require any application for credit–whether for a loan, opening a bank account, asking for a line of credit or getting a credit card–to have a notarized thumbprint on the application.

For someone to commit “identity theft” with this requirement in place would require them to either submit their fingerprint, which would make discovery of their true identity relatively easy in cases of fraud or require that they have a corrupt notary public as an accomplice. In either case, it would likely eliminate most of the opportunistic cases of “identity theft”, and allow law enforcement to concentrate on other, more dangerous types of crimes.

Then, when an account being investigated for fraudulent activity, the person whose identity was “stolen” can simply ask to get a copy of the notarized thumbprint. If the thumbprint isn’t theirs, then they would not be liable for any of the charges unless the bank could prove beyond a reasonable doubt that they, in fact, had opened the account and committed the fraud. This would also prevent the financial institution from ruining their credit history.

This simple requirement shifts the onus of proof from the innocent victim, who most likely had nothing to do with the fraud and no idea it has occurred until after the fact, to the financial institution that did not properly do its due diligence. This would also shift the costs of dealing with fraud from the victim to the financial institution responsible for allowing it to occur, and gives the financial system a strong incentive for stopping or reducing such fraud.

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