Security Fix – The Washington Post
Chris Hoofnagle, senior fellow with the Berkeley Center for Law and Technology, believes that the United States could get a better handle on cyber crime and identity fraud if banks were required to disclose more fraud data, such as the volume of money involved in the crimes (including fraudulent transactions where the consumer/business was ultimately made whole or where anti-fraud measures foiled the attempted theft of funds).
“Currently we don’t know the scope of the problem,” Hoofnagle writes. “We do know that it is a big problem and that the losses are estimated in the tens of billions. Without reporting, we cannot tell whether the market is addressing the problem. Reporting will elucidate the scope of the problem and its trends, and as explained below, create a real market for identity theft prevention.”
Hoofnagle also takes aim at the claim that consumers don’t bear the costs of identity theft, which conventional wisdom says is usually assumed mostly by lending institutions and merchants. “Consumers ultimately pay for the crime through lost time, inconvenience, higher financial services fees, and sometimes through out-of-pocket costs. There is another, largely unknown way in which we all pay for identity theft that causes the market not to correct the problem: lending institutions write their losses off against corporate income taxes.”