How To Fix The Data Theft Mess: Put The Burden On Data Collectors
from the incentives-are-everything dept
With all the stories concerning data theft lately, the reaction has been typical. Extreme outrage followed by politicians pushing a law that won't actually solve the problem (not that anyone will ever go back and point that out to them). Instead, it would be nice if people started looking at ways to actually deal with the issue. The NY Times is running an opinion piece comparing the situation to the "credit card crisis" in the 1970s, when banks were pushing credit cards on people and criminals were stealing the cards and using them for fraudulent transactions. Congress finally passed a law that limited credit card loss to $50 on a single transaction, and while the banks screamed about how awful this was, the article notes that it actually came back to save the credit card industry. It made people feel safe about using credit cards and it forced the banks to take the issue of fraud much more seriously. So, the article suggests, shouldn't we be doing the same thing, and placing the burden for any fraud committed on the companies that are storing your data? That has to be better than the current set of proposed laws that just tell data collectors to do a better job protecting the data -- without giving them any real incentive to do so.
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Too Obvious...
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Proxmire was right
"Here's what Mr. Proxmire did. First, in 1970, he drafted a bill that banned the practice of "dropping" credit cards on people without their consent. Four years later, he pushed through a bill that limited consumer liability to $50 if a credit card was used fraudulently."
International Herald Tribune" or New York Times
The same two things would cure identity theft:
1) Ban the practice of storing personal data without consent
2) Limit liability to $50.
Just limiting liability is not enough, because currently a lot of companies *legally* store your details without your consent, so how can you possibly prove which one is responsible for losses due to identity theft, so you can make them pay up?
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Sue
CLASS ACTION SUITS !
The " Lottery " of a new generation ...
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Re: Sue
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Data collectors.
I believe that the only reason that actions such as the credit card solution can be taken is if the actors involved can act to put off the real costs to some large lucrative, easy to milk group, which is what has happend with credit cards.
Indivduals think they are protected by this, but the fact is that massive fraud is ignored for the most part because the banks don't really pay. Individuals may think they don't pay for this, but the 18 to 21 percent rates they have to pay evenutally for credit could be lower if the banks could get their money and have less fraud to dump on the backs of consumers.
This is unlikely to happen, because there simply is no real way to find a pool of stuipid or captive money to tap to "pay" for the slipups.
And they wont be put out of business, because in the end the government really does like to have as many people being watched as possible.
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Don't Tread On Me
Then there's the issue of offshoring. If too many restrictive laws are enacted too quickly, companies may simply take your data to a place where you can't touch them.
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