An easy way to decrease identity theft
Some
time ago I saw a news report about some con artist who took mortgages
on other people's homes, pocketed the money and of course promptly
disappeared. The victims of this con should have been the idiots who
granted the mortgages, but of course the real victims were the
homeowners who suddenly learned that they had lost their homes and had
to pay something like ten thousand dollars to fix the situation. The
report made me pretty angry, and I got even angrier when I realized
that the whole event would have been completely trivial to prevent.
I, for one, don't really care about the losses that lax creditors have to pay to the monster of identity theft. My problem with the identity theft is that the creditors get to externalize their damages to completely innocent victims whose credit histories are ruined and can be fixed with only great effort and cost. (Speaking of which, what exactly is the credit bureau's financial incentive to combat identity theft?) This should not be allowed in a just society. In fact, a creditor ruining an innocent person's credit report due to creditor's lax identity verification should automatically be grounds for a defamation tort.
To correct the problem, I propose the following simple change to how creditors must act: any time someone applies for credit, his photo is taken and stored in the creditor's files.
The photo that the creditor's representative snaps in situ is not supposed to verify anything, but to create an audit trail in case the applicant is not the person who he claims to be. If the applicant is honest and is who he says he is (or at least doesn't challenge the unpaid debt), the photo just sits in the file, unused. However, if the applicant is an identity theft impostor, the police have a mug shot of the criminal that they can use to go after him. Perhaps some kind of web site "Do you know these people?" could be established, offering bounties to people who recognize and report the impostors pictured in the site.
This policy would be completely trivial to enact in our modern era of cheap digital cameras, and it would quickly pay for itself many times over by deterring credit fraud. If the con artists and identity thieves know that they have to smile and say cheese every time they want to get credit, they would quickly move to more lucrative forms of crime.
Of course, the proposed policy necessitates that the applicant and creditor must meet face to face, which makes it impossible to grant instant credit over the internet. I shed no tears for such creditors, since it is their fault that we have the whole identity theft problem in the first place. Perhaps a simple compromise is that one can freely grant credit without taking the applicant's photograph, but in that case, the irresponsible creditor doesn't get to report the unpaid debt to the credit bureaus. This would also satisfy the tinfoil hat libertarians and other paranoid personality types who want there to be some form of anonymous, untraceable credit. Since these creditors would carry the financial burden of identity theft and therefore had to compensate with higher interest rates, people could choose in the free market whether they prefer lower interest rates to immediate credit.
In the end, to properly combat identity theft we should actually start giving people real punishments for it. I know I am alone in this, but I would go as far as making identity theft a capital offense, with the idea that since the criminal obviously doesn't recognize his own personal identity, the society shouldn't do so either. At least as crimes go, identity theft ought to be considered as serious as counterfeiting money: both attack directly the very basis that the modern society is built on and simply cannot be allowed. For starters, a teenager who buys beer or gets into a night club with a forged ID should be treated as harshly in the eyes of law as a teenager who counterfeits money to pay for the beer or the cover charge.
I, for one, don't really care about the losses that lax creditors have to pay to the monster of identity theft. My problem with the identity theft is that the creditors get to externalize their damages to completely innocent victims whose credit histories are ruined and can be fixed with only great effort and cost. (Speaking of which, what exactly is the credit bureau's financial incentive to combat identity theft?) This should not be allowed in a just society. In fact, a creditor ruining an innocent person's credit report due to creditor's lax identity verification should automatically be grounds for a defamation tort.
To correct the problem, I propose the following simple change to how creditors must act: any time someone applies for credit, his photo is taken and stored in the creditor's files.
The photo that the creditor's representative snaps in situ is not supposed to verify anything, but to create an audit trail in case the applicant is not the person who he claims to be. If the applicant is honest and is who he says he is (or at least doesn't challenge the unpaid debt), the photo just sits in the file, unused. However, if the applicant is an identity theft impostor, the police have a mug shot of the criminal that they can use to go after him. Perhaps some kind of web site "Do you know these people?" could be established, offering bounties to people who recognize and report the impostors pictured in the site.
This policy would be completely trivial to enact in our modern era of cheap digital cameras, and it would quickly pay for itself many times over by deterring credit fraud. If the con artists and identity thieves know that they have to smile and say cheese every time they want to get credit, they would quickly move to more lucrative forms of crime.
Of course, the proposed policy necessitates that the applicant and creditor must meet face to face, which makes it impossible to grant instant credit over the internet. I shed no tears for such creditors, since it is their fault that we have the whole identity theft problem in the first place. Perhaps a simple compromise is that one can freely grant credit without taking the applicant's photograph, but in that case, the irresponsible creditor doesn't get to report the unpaid debt to the credit bureaus. This would also satisfy the tinfoil hat libertarians and other paranoid personality types who want there to be some form of anonymous, untraceable credit. Since these creditors would carry the financial burden of identity theft and therefore had to compensate with higher interest rates, people could choose in the free market whether they prefer lower interest rates to immediate credit.
In the end, to properly combat identity theft we should actually start giving people real punishments for it. I know I am alone in this, but I would go as far as making identity theft a capital offense, with the idea that since the criminal obviously doesn't recognize his own personal identity, the society shouldn't do so either. At least as crimes go, identity theft ought to be considered as serious as counterfeiting money: both attack directly the very basis that the modern society is built on and simply cannot be allowed. For starters, a teenager who buys beer or gets into a night club with a forged ID should be treated as harshly in the eyes of law as a teenager who counterfeits money to pay for the beer or the cover charge.
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