• Credit
• Data Breach
• Fraud
• Identity Theft
• Other News
• Privacy
• Reviews
• Scams
• Tips
• Truston

« Previous Post | Blog Home | Next Post »

Wired's Article on the So-called Anti-ID-Theft Bills

Posted on Apr 21, 2006 by Tom Fragala

Bruce Schneier has an article in Wired News about the new identity theft bills floating around Congress. Probably the biggest flaw with these potential federal laws are they are written to wipe out stronger state laws that already exist. I wrote about it previously here and here. Mr. Schneier writes:

California was the first state to pass a law requiring companies that keep personal data to disclose when that data is lost or stolen. Since then, many states have followed suit. Now Congress is debating federal legislation that would do the same thing nationwide.

Except that it won't do the same thing: The federal bill has become so watered down that it won't be very effective. I would still be in favor of it -- a poor federal law is better than none -- if it didn't also pre-empt more-effective state laws, which makes it a net loss.

He goes on to make a very good point I agree with:

…disclosure is important, but it's not going to solve identity theft. As I've written previously, the reason theft of personal information is so common is that the data is so valuable. The way to mitigate the risk of fraud due to impersonation is not to make personal information harder to steal, it's to make it harder to use. Disclosure laws only deal with the economic externality of data brokers protecting your personal information. What we really need are laws prohibiting credit card companies and other financial institutions from granting credit to someone using your name with only a minimum of authentication.