Identity Theft and How It Has Affected Societys Way of Life - Research Paper Example

Identity Theft Submitted: Identity Theft Identity theft is on a rise all over US as well as other countries. The stakeholders that are majorly facing difficulties due to this criminal act include businesses as well as consumers. In this paper we will focus on the definition of Identity theft and will even focus on the degree of damage caused by the problem. Focus will be given to the problems experienced by consumers and the business world and what policies are already in position to solve the issue and what kind of policies are required to counter the problem. Identity Theft Introduction One of the biggest concerns of the age of e-commerce, the age of 21st Century is Identity Theft. Every part of an individual’s life is surrounded with electronic items such as computers, cell phones and credit cards. Transfer of information is taking place every second in our lives, whether we are at home, work or educational centres; information is flowing from one at to another at every next moment. Due to immense use of technology, individuals end up leaving a huge track of footprints that are digital in nature. These tracks can be used by any other individual to obtain personal as well as public information of any particular individual. If these footprints fall in the hands of people who may use them wrongly, we may end up suffering heavy losses both emotionally and financially. Identity theft is referred to the criminal act of impersonating as another individual and obtaining benefits in the name of that individual. Identity theft may even be used to obtain an individual’s information and then committing crimes in the name of that individual. The US General Accounting Office has defined identity theft as an act of obtaining an individual’s information and using that information to gain financial benefits (Hayward, 2004, p.93). Information and Privacy Commissioner defines this crime as an act of impersonating as another individual and then obtaining credit in his name (Barnard-Wills, 2012, p.188). A survey conducted by the Federal Trade Commission conducted in 2003 stated that during 2002 the number of victims of identity theft have tripled as compared to the statistics of 2001 ((Hayward, 2004, p.61). The Chubb Insurance conducted a survey during 2005 and figured out that one American our 5 American is a victim of this crime. Identity theft can be conducted in various ways (Loberg, 2004, p.34). The methods of conducting this crime are being updated and altered quite frequently. Activities of injecting an individual’s computer system with viruses and malicious instruments are conducted to obtain that individual’s personal information. Certain individuals even impersonate as legitimate businesses and obtain information from individuals such as keys to accounts and account number pin. Instances of imitating as a powerful individual of a company and obtaining passwords from the company employees and then injecting viruses to obtain information are even a form of conducting identity theft. Previously, it was wrongly believed that an individual has to be a genius of computer world to conduct the crime, but the main issue due to which these crimes are easily conducted is the constant supply of private information. Information that is obtained during an act of identity theft is even referred to as tombstone data; this information includes information that can be used to identify an individual. Once an identity thief has ample amount of personal information of an individual, he can gain several financial benefits. Three basic portions of personal information including: postal code, sex and DOB; are needed to conduct 90% of transactions in US, this shows how easy it is to conduct a crime of identity theft (Sweeney, 2002). Body Victim’s Loss Identity theft cases are so subtle that in various numbers of cases, the individual who have become the victim learns about the act when it becomes very late. In such cases, people end up suffering from credit issues as suddenly they learn that they have already taken out the limited amount of loan and cannot have more until he/she pays the prior loan. Data rape is a term used to define the damages done to the victim’s loss (Boatright, 2003, p.215). Once the theft has taken place, the victims are the ones who have to clean the mess created by the thief, he/she has to prove that they have not taken the credit and have to save their credit history from being recognized as defaulter’s credit history. Due to an individual’s negative credit history, an individual experiences various issues in obtaining new loan. The victim has to take charge of all the activities that are required to be performed to clear his name and solve the problem. The problem is that they are already experiencing issues due to credit they have not taken and along with this issue comes the issue of spending money and time to solve the problem. Spreading The Word Due to the various problems faced by consumers, government and other institutions have taken measures to help consumers by providing them education and awareness on the topic of identity theft. These advices are provided in two forms, advices are provided on how to save oneself from such theft and secondly how to deal with the situation if an individual is a victim. Consumers are made aware of various methods of protecting their personal information such as usage of shredders and avoidance of dumpsters and to have passwords that are hard to crack and different methods of encryption. The ideology behind these tips is that people can save themselves from identity theft if they take precautionary steps. According to Daniel Solove, the problem cannot be solved even if consumers take precautionary measures; this is because their personal information is most of the time extracted without their consent (Solove, 2003). For example: In US, the SSN (Social Security Number) is used in various walks of life, if individuals do not provide this number they may experience difficulty in conducting various transactions. Another problem is that, people are not informed about how they can obtain their regular credit reports and from where they can obtain these reports. The Real Issue Individual’s participation in preventing the crime is less than their participation in encourages the crime. The main issue due to which the crime has gained encouragement is the lack of proper management of information and increase in the amount of usage of information that can be used to identify an individual. The problem is that when personal information is obtained, it is not protected through information protection methods, and the criminals can easily view that information and understand it and the information that can identify a person is not separated from the data obtained. The issue of theft of personal information is quite new, a survey conducted on 4000 businesses of US showed that half of these businesses have experienced breach in their security system that secures the database (Gordon, 2005). The intensity of the problem of identity theft has elevated because of the theft of information that is personal to customers of different businesses. Cases During 2005, City group stated that information of 3.9 million customers was stolen and the information saved in the data storage devices was not protected through encryption (Cherry, 2011, p.185). Time Warner, a giant in the media industry, reported information of US employees and the dependants of these employees and their SSN numbers was stolen and the data on the storage devices was not protected (Cherry, 2011, p.185). During the same year officers of Boston Collage warned the total number of 120,000 alumni that the computer system of the educational centre was hacked and the personal information including Social Security Numbers of graduates of the collage might have been stolen (Schneider, 2009, p.345). Again in the same year Bank of America reported that 1.2 million employees’ private information might was stolen and again the data was not protected through encryption (Cherry, 2011, p.185). These examples clearly lead to the conclusion that identity theft is on a rise and the reason behind the ease of committing this crime is poor management of information. These examples even represent the facts that individuals cannot prevent their personal information on their own as they have to provide this information for conducting various day to day activities. Value of Personal Information The reason due to which businesses are obtaining more and more personal information of customers is to understand their customers in a better way in order to make effective business decisions. A digital track record is left by an individual as soon as the individual accesses internet websites or uses a cell phone or conduct activities involving digital technology. These tracks are first obtained by companies, and then they understand and create a portfolio of their customers and shape their various business activities in accordance to these portfolios. This information is especially very important for the marketing and the advertising segment of a business and this information is becoming more and more important to them as they become more and more able to obtain such information. The best source of tracking an individual’s information is internet, companies use these tracks to obtain information about individuals and then they sell this information in shape of software to advertisers and marketers. The marketers use this information to understand the behaviour of individuals and direct their marketing activities in accordance to the understood behaviours of the consumers. Information technological advancements have aided marketers in obtaining required consumer information, the practice should not be considered wrong until the consumer has agreed to access to their information. Information is not always obtained with the consent of the consumers, in various cases; companies obtain information from third party vendors. Companies may not consent with the consumer before obtaining information because they do so for conducting checks of the background of the consumers. This way of obtaining information has come under continuous debate because the policy makers have not yet shown much interest in the issue, the information being traded is said to have a value of $10 billion on yearly basis. Certain regulations have been passed in US to counter the problem, these regulations includes the Database Breach Notification Act which was passed to make companies disclose any events of data breach to their customers (Grama, 2011, p.239). Several other similar regulations are being debated to help consumers. Regulations regarding the consent of consumers in the process of obtaining information and regulations that may restrict companies from obtaining personal information from consumers are even being debated. A major concern is that the information that is personal to consumer is controlled by those individuals and organizations that do not have a direct relationship with the consumers and any harm to consumers and customers will be of little or no concern to them. Concerns of Business and Consumers When an act of identity theft takes place, the people mostly damaged by the act are those whose personal information has been used in a wrong manner. On the other hand, business end up losing almost nothing and victims have to pay for the negligent attitude of the businesses. The reason due to which businesses show low interest in spending money on securing customer information is that businesses do not have an economic incentive of such investments. If consumers are the ones who are paying the high cost of breach of data, and businesses are negligibly effected by the act, the probability of businesses participating in security of data are quite low. Banks in Canada are not replacing the use of ATM cards with smart cards which are much safer than ATM cards as they are encrypted. The reason due to which this replacement is not taking place is the cost of replacement. The cost that Canadian banks will experience for manufacturing smart cards to replace ATM cards is over 500 million while the cost they experience due to fraud cases of debit card is only 8.8 percent of the replacement cost. This clearly shows that due to high cost of replacement, Canadian banks are not making the move but the burden of the breach falls on the shoulders of consumers and they end up paying for mistakes not made by them. Certain existing rules and regulations require companies to act in accordance to the duty of care; this makes businesses’ process of obtaining and administering customer information through unique ways. These ways include: obtaining consent from the consumer, providing them rights to correct their information and make customers aware while obtaining information. Another reason due to which businesses have to take care of the personal information of the consumers include: the increase in concerns of the consumers regarding their personal information and these concerns are negatively impacting their decision of whether to obtain services from an organization. The bills that have made it compulsory for companies to notify their customers of security breach can even stimulate businesses to manage data in a better manner. This is because when customers will be informed that they have experienced or there are chances of them experiencing losses due to a company’s mistake, they will stop trading with that company and will advise others to do the same which can result in loss of current as well as future customers. The set of rules and regulations that are being created to help minimize the threat of identity theft are most passed on accountability and transparency. Businesses need to be held accountable for information breaches and low level security of databases. They need to be penalized through the means of judiciary in order to make increase the concerns of the businesses towards breach of customer information. These penalties should be heavy in nature and should affect the business both financially and psychologically. When rules and regulations will result in heavy financial losses for businesses, there will be an incentive for the firms to invest heavily in better data protection methods. Rules and regulations towards the transparency of how businesses obtain information and how they use this information need to be created. When transactions of information will become transparent, customers will automatically be able to figure out when to give information and to whom to give information to. Customers will be able to keep their information safe and prevent their information from falling into wrong hands if transparency is properly addressed in policy making. Conclusion The count of acts of identity theft is on a rise and is affecting the society in different ways. The main stakeholders that are experiencing the adverse effects of identity theft are the consumers and the businesses. Consumers are the ones that pay the higher cost of identity theft. They are not only ripped off financially by the thieves, they are even subjected to loss of time and effort. First they experience the loss of finances, next they have to spend time persuading that they never conducted the fraudulent act and during this process they even spend heavy amount of money. Businesses show little concern but the losses they suffer are even quite high. Firstly they lose the trust of current customers and their credibility in their industry and overall market place even decreases which leads to loss of potential customers. The problematic scenario is that the loss experienced by the businesses is less than the loss experienced by the businesses. This is because the businesses are currently facing less economic loss. Government and other institutions have to develop policies that will result in higher loss for the businesses, and then only these businesses will take the matter of data security breach seriously and invest heavily in better ways of protecting and managing data. While making policies, policy makers should give importance to the transparency and the accountability factors. Increase in the regulations based on these factors will automatically make organizations more concerned about the issue of identity theft. References Hayward, C. L. (2004). Identity theft. Hauppauge, N.Y: Novinka Books. Barnard-Wills, D. (2012). Surveillance and identity: Discourse, subjectivity and the state. Farnham: Ashgate. Loberg, K., & Silver Lake Publishing. (2004). Identity theft: How to protect your name, your credit and your vital information-- and what to do when someone hijacks any of these. Los Angeles, Calif: Silver Lake Pub. Sweeney, L. (January 01, 2002). k-Anonymity. International Journal of Uncertainty, Fuzziness and Knowledge-Based Systems, 10, 5, 557-570. Boatright, J. R. (2003). Ethics and the conduct of business. Upper Saddle River, N.J: Prentice Hall. Solove, D. J. (January 01, 2003). Remedying Privacy Wrongs -- New Models - IDENTITY THEFT, PRIVACY, AND THE ARCHITECTURE OF VULNERABILITY. The Hastings Law Journal, 54, 4, 1227. Gordon, L. A., Computer Security Institute (San Francisco, Calif.), & United States. (2005). 2005 CSI/FBI computer crime and security survey. San Francisco, Calif.: Computer Security Institute. Cherry, D. (2011). Securing SQL server: Protecting your database from attackers. Burlington, MA: Syngress. Schneider, G. P. (2009). Electronic commerce. Boston, Mass: Course Technology. Grama, J. L. (2011). Legal issues in information security. Sudbury, Mass: Jones & Bartlett Learning. Read More