2008


Ranking Corporate America on Identity Theft

Bits Blog - The New York Times

http://bits.blogs.nytimes.com/2008/02/27/ranking-corporate-america-on-identity-theft/

The new statistics are part of a provocative, though preliminary, report, “Measuring Identity Theft at Top Banks,” by Chris Hoofnagle, a senior fellow at the Berkeley Center for Law and Technology at the University of California at Berkeley.

Mr. Hoofnagle thinks that instead of swallowing the claims in commercials about identity-theft protection, consumers should be able to “vote with their feet” and pick the most secure stores, phone companies and financial institutions.

Mr. Hoofnagle previously asked lawmakers to force lenders to disclose their internal figures on fraud and identity theft. But that request went nowhere, so he is now trying something of a brute-force approach.

Last year, under the Freedom of Information Act, he asked the Federal Trade Commission for three months of data on the complaints submitted to the commission by victims of identity theft. The commission does not normally release this data to the public. Earlier this month, the F.T.C. sent him a disc with more than 88,000 complaints from January, March and September of 2006, and he tabulated the institutions most often cited by consumers in their fraud complaints.

Naturally, the country’s largest banks and phone companies showed up most frequently. So, to account for size in the financial services industry in particular, Mr. Hoofnagle factored in the total amount of deposits per bank as of Dec. 31, 2006.

 

Mr. Hoofnagle also uses the overall amount of deposits because banks do not make public their total number of accounts, which would be a more accurate indicator of size. And he also does not have a way to compare the fraud vulnerabilities of banks with phone companies or retailers like Target, which shows up high on the consumer complaint list.

Mr. Hoofnagle concedes there are limitations to the study. “It needs more information to be useful to consumers,” he said. “But it should be useful for banks, who themselves are probably curious what their competitors’ fraud rates are.”

Mr. Hoofnagle said he believed the study was an important step in creating an “identity theft marketplace” for consumers.

“I’ve been working for years to try to spark a market, a true market, for competition on preventing fraud,” he said. “Some of these institutions have attempted to compete based on advertisements, but I’m a real believer in the idea that if you give consumers information, they can make better decisions.”

 

2/27/2008