Volume 5, Issue 2    |    Back to Publications

Bad News for the Privacy Crowd

Identity theft on the decline? Tell me it is not so. According to a new study, identity theft may actually be on the decline. In a report released late last month, it seems that while identity theft continues to afflict millions of U.S. consumers, the number of victims is declining. According to James Van Dyke of Javelin Inc., a research firm that conducted the study, about 9.3 million Americans were victims of the crime last year. According to the Federal Trade Commission10.1 million consumers had been victimized in 2003. Still one in every 31 consumers were victims last year. The report however, holds another surprise. Contrary to popular wisdom and the ceaseless waxing of privacy advocates, using the Internet may be a consumer's best fraud-fighting tool. In fact, the study suggests that the Internet has gotten a bad rap and the risk it poses to consumers may be grossly exaggerated. "The very thing consumers are most afraid of is actually the thing that makes [them] safer," said Van Dyke. Those who noticed the fraud quickly by viewing their accounts online usually were able cut their losses, Van Dyke said. The study also showed that consumers who spot fraud online suffer an average theft of only about $500 while consumers who spot the problem by other means suffer average losses closer to $4,500.

The study also suggests personal data is most often stolen offline-from an employer or trash bin. Only 12 percent of the victims in the study reported they believed their information was stolen electronically. Stolen or lost wallets, checkbooks, and mail remain the principal mechanisms by which thieves obtain the identities of others. FTC attorney Lois Greisman said, "The crime is not growing." Greisman concluded, "We're seeing a leveling off and that's where you're going to see your first signs of improvement. I'd like to say this is a positive signal."

All this spells bad news for privacy advocates and headline grabbing legislators searching for excuses to eliminate our access to public records. For more than a decade, federal and state governments have embraced the elimination of access to public records at all levels. Under the false banner of privacy protection the war against identity theft has resulted in little more than closing access to government records that were once in the public domain. Fraud investigators have long known that most identity thieves do not use public records or computers to steal identities. Thieves do not need to steal someone's identity in order to commit a crime. All they need is to be creative enough to fabricate a nine-digit number that does not begin with an eight and nine (the Social Security Administration does not issue SSNs starting with an eight or nine) and select a date of birth other than their own. Viola! A new identity. Fighting ID theft by eliminating access to public records is like attempting to stop telephone fraud by eliminating the public's access to telephones. Wouldn't it make more sense to just enforce existing law and punish the criminals?

Eugene F. Ferraro, CPP, CFE, Editor

Employers Verify Workers' Social Security Numbers Faster

Verifying workers' Social Security numbers is not required for most employers. However, the practice is gaining acceptance and has proven helpful in identifying undocumented workers and people to who use false identities. To help employers do a better job, the Social Security Administration will soon allow employers to verify if SSNs provided by their employees match the SSA's records by going online at http://www.ssa.gov/. Companies checking on ten or fewer workers will be served instantly. Larger requests will have to be scheduled and take a day to process.

Senator Dianne Feinstein Proposes Three More Privacy Bills

California Senator Dianne Feinstein last month introduced three new privacy bills. One of them appears identical to a bill she introduced last year which would restrict non-government use of SSNs. However, some states have already begun to realize curbing the use of SSNs can be costly to many employers. Recent states' rush to put a stop to identity theft by barring the use of SSNs on drivers' licenses and other state issued documents possess potential recordkeeping problems for both employers and states. Utah, Ohio and New York dropped SSNs on unemployment insurance claims forms filed by ex-employees, leaving companies with no way to track or challenge claims. Some firms were able to get exemptions, but more problems are likely as more states and the feds follow suit and further restrict the use of SSNs.

Fact: Computer crimes accounted for only 11.6 percent of all identity fraud in 2004 in which the cause was known. Half of those crimes stemmed from spyware, software that surreptitiously tracks users online or secretly loads monitoring software on the consumer's computer.
Source: Javelin Strategy & Research

New Device Delivers Alcohol Without the Liquid

A new device from England provides alcohol consumers a new way to enjoy their favorite beverage. The device, Alcohol With Out Liquid (AWOL) enables the inhalation of oxygen combined with alcohol vapor. Spirit Partners, Inc. of New York recently acquired the exclusive license to market the AWOL technology in the United States. The AWOL device consists of two simple components: an oxygen generator and a hand-held vaporizer. Tubes from the generator attach to the vaporizer. The user selects his favorite distilled spirit, and pours into the vaporizer. Oxygen mixes with the alcohol producing a mist, which is inhaled through the mouth or nose. Resultantly, alcohol enters the bloodstream through the lungs rather than the stomach. Once the alcohol enters the bloodstream, it affects the body in the same way as drinking alcohol. Additionally, the alcohol leaves the body in the same manner as if it had been consumed by drinking.

The manufacturer claims that when used responsibly, AWOL poses no greater risk to the consumer than consuming alcohol in the traditional way. Lawmakers are not convinced. State Senator Bob Hagedorn of Colorado says, "An AWOL device is to alcohol what a crack pipe is to cocaine." The senator has proposed a bill that would ban sale, purchase or use of the device in Colorado. Others are concerned as well. Because the device is available in both a commercial and individual user configuration, some college and university administrators have expressed concern of the devices finding their way onto campus and in the hands of students under the age of 21.

Courts Punch Holes in Company Body-Piercing Policy

Attempting to manage the appearance of workers in the public view, some employers have established anti-body piercing policies. Employee suits charging discrimination based on personal appearance-tattoos, dreadlocks, religious symbols, and body-piercings are on the rise. While most courts have ruled that employers have the right to set standards for employee appearance, compromise is safer. Costco Wholesale's offer to let a store cashier cover her pierced eyebrow with a bandage won the court approval. Domino's Pizza allowed a Sikh to substitute its standard cap with turban and its logo also won. Best advice: Compromise if possible. Zero tolerance policies are rarely enforceable and often generate employee ill will.

According to the TSA, there is an estimated 12.5 million tons of air cargo transported per year, 2.8 million tons on passenger planes. The remaining 9.7 million tons of freight is being shipped in cargo planes.

Travel Tip: More airline travelers are reporting lost or stolen notebook computers while passing through security. The TSA says that passengers often confuse their computer with that of some else's and do not realize it until they attempt to use it. Best advice: affix asset tags or high-visibility labels identifying you or your organization on the underside of the computer. When passing through security place the computer on the x-ray conveyor upside down (labels facing up) to make it more easily identifiable as yours. What's more, well-marked valuables tend to disappear less frequently than those with no markings.

MapQuest it!

MapQuest became a verb before Google. The small Denver, Colorado firm and its fifty or so employees, produce driving directions for over 45 million direction-challenged users a month. Avid users, however, know that on rare occasions the directions are not accurate and that small mapping mistakes can create big frustrations. To avoid frustrating your customers, MapQuest the route from your local airport to your office and see if the directions are accurate. If not, contact MapQuest and report the error. Sources tell us the folks at MapQuest appreciate the input and are quick to make corrections.

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