Identity Theft Hurts

US Congress to give victims of identity theft some recourse

Today Senator Leahy announced an anti-cyber crime provision bill that is set to become law.  The bill (Identity Theft Enforcement and Restitution Act) is expected to be signed into law by President Bush.

As a personal victim of financial identity theft, only one provision in the bill sparked my interest.  The provision that gives victims of identity theft the ability to seek restitution for the loss of time and money spent restoring [their] credit and remedying the harms of identity theft.

I thank the Senator for this legislation, but I do hope Senator Leahy means that I as a victim can sue a bank for issuing an identity thief a creditcard under my name.  Here are the following reasons I think the banks and creditcard issuers are liable:

1. The banks didn’t go after the identity thief to collect the debt, they came after me.
2. The credit bureaus added derogatory comments to my credit report, not my identity thief’s credit report.
3. The collection agencies sent the collection letters to me, not the identity thief.
4. I filled out fraud affidavits to prove my identity.  The identity thief who opened credit cards in my name did have this burden.

If a bank issues a creditcard to an identity thief using someone else’s identity, then a $5000 dollar fine per incident payable to the victim would make the banks and creditcard issuers of instant credit remedy their sloppy identity and address verification processes practically overnight.

Are you worried that the banks and creditcard issuers would be “victims”?  Don’t worry about that.  Fraudulent creditcard accounts are written of as a tax-deductible operating expense by the banks. 

In closing Senator Leahy, the banks should also be forced to disclose the number of fraudulent accounts they enable in an annual report, clearly posted on the bank’s websites for all consumers to see.