To root out identity theft, set restrictions in workplace

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The Detroit Free Press

The news last week that a consumer advocacy group was able to get top government officials’ personal information online is a shocking, but not an entirely unlikely event.

The California-based Foundation for Taxpayer and Consumer Rights said it paid an online site $26 to get the Social Security numbers and home addresses of several top Bush administration officials. The group’s stunt showed the need for stronger protections of personal information and the potential for abuse.

Woe to the 7 million U.S. adults whose personal information is used for more nefarious purposes each year.

Recent research indicates that identity thefts are primarily inside jobs. In a study conducted by the Identity Theft Crime Lab at Michigan State University, more than half of 1,037 identity thefts studied were stolen in the workplace by employees or by people impersonating employees.

The costs to victims both emotional and financial are immeasurable. Based on first-hand experience with victims at the ID Theft Crime Lab, we have learned that all victims experience a range of similar emotions.

Victims express fear that further losses will occur and that harm will come to their families, and they feel helpless when learning their identities cannot be recovered and law enforcement cannot help. All victims report a loss of productivity, sometimes considerable, both at work and at home. Some may suffer from clinical depression.

Over time, when fraudulent credit and criminal records have been cleaned up and precautions taken to protect the future flow of personal information, victims gain acceptance of the situation, knowing they have done all they can.

Now, due to an accelerating trend in business practices, a surge in identity rapes can be expected.

Leading companies such as IBM, General Electric, Microsoft, Oracle and General Motors Corp. are transferring abroad entire white-collar job functions. Under extreme competitive and economic pressures, executives are cutting costs by using cheaper labor in countries such as India, Russia, China, Ghana and Bermuda.

Proponents argue that the exporting of white-collar jobs will increase competition, breed new jobs and, in the long-term, strengthen the U.S. economy and its position in the global marketplace. But consider the type of jobs being exported: payroll, accounting, benefits, personnel, database management and customer services. The job tasks all require knowledge of employee or customer personal information. The jobs all involve the processing of names, addresses, Social Security numbers and date of birth. What are actually being exported are U.S. identities.

Another cause for concern is the increasingly easy access of U.S. identities in potentially thousands of workplaces in foreign countries known for high crime rates. Much like the terrorists of 9/11, organized criminals including drug dealers, money launderers and others use stolen identities to purchase goods and services involved in criminal activities. Criminals use stolen identities to open fraudulent credit card and retail accounts, to access retirement and bank savings and checking accounts and to commit telecommunications and wire fraud. The offshoring of identities increases the opportunities for identity thefts and the global victimization of U.S. citizens.

There’s a solution. State and federal legislation on identity theft has been enacted and several federal agencies recently proposed a response program. Although largely reactive, these measures are a beginning. What now is needed is a well-planned strategy and a coordinated and unified effort by legislators, law enforcement, federal and state government officials, attorneys, judges, business managers and even applied researchers who can shed light on identity theft crimes and criminals.

Businesses can also be sure they hire honest workers by administering paper-and-pencil tests developed by industrial psychologists to weed out dishonest job applicants.

Law enforcement resources drained by Homeland Security must be renewed and courts of law must increase penalties for identity theft crimes. And attorneys must help unravel the jurisdictional problems involving identity theft networks that operate across county, state and country lines.

Ultimately, the solution involves the prevention of identity thefts where they most occur, beginning in the workplace.
The author JUDITH COLLINS is director of the Identity Theft Partnerships in Prevention and Identity Theft Crime Lab at Michigan State University. Write to her in care of the Free Press Editorial Page, 600 W. Fort St., Detroit, MI 48226.

Consumer Watchdog
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