Identity theft targeted
David Canton - for the London Free Press - October 29, 2005 Read this on Canoe
The Consumer Measures Committee (CMC), a Canadian forum of representatives from all levels of government, conducted a public consultation from July 6 to Sept. 15 on how to prevent identity theft in Canada.
Its discussion paper, Working Together to Prevent Identity Theft, set out proposals for preventing and detecting identity theft as well as for providing assistance to victims.
Identity theft occurs when someone's personal identity information is acquired and used without their knowledge for fraudulent purposes.
The effect of identity theft on victims can be extensive, from having to pay debts incurred by the perpetrator to loss of their personal credit rating and reputation.
It is difficult to determine the actual number of identity thefts because many victims do not report these crimes. Also, there is no single organization that handles identity theft complaints. Reports are made to multiple institutions such as government and police offices, credit bureaus and credit card companies.
Identity theft has been on the rise, according to recent polls. In a February 2003 Ipsos Reid poll, about nine per cent of Canadians said they have been a target of identity theft. TransUnion LLC, an American credit reporting company, received a 500 per cent increase in reports of identity fraud from 1999 to 2002.
The CMC hopes to reach a proactive solution to identity theft by drafting legislation.
The CMC's suggestions include blanking out credit card numbers on all receipts, requiring identity verification for access to credit reports and not displaying social insurance numbers on credit reports.
To assist in detecting identity theft, the CMC suggested allowing consumers to place freezes on their credit reports, preventing access to the report by anyone else. It also proposed requiring organizations that hold personal information for their own use to notify consumers and credit bureaus if they have a security breach.
The CMC recommended credit bureaus be required to issue fraud alerts after receiving a security breach warning from an organization.
To lessen the aftermath of identity theft on consumers, the CMC suggested compelling lenders to provide victims with details of fraudulent transactions and requiring credit bureaus to remove fraudulent debts from a consumer's credit report.
The CMC proposed that creditors, credit bureaus and retailers be held liable for identity theft caused by their failure to protect personal information. A company that failed to block a customer's credit card number would be responsible for compensating that customer for any loss caused by that failure.
The Electronic Privacy Information Center (EPIC), a Washington, D.C.-based public interest research centre, participated in CMC's public consultations. It applauded CMC's efforts, contrasting it to the U.S. approach focusing on measures, such as fraud alerts and high penalties, which have not proven successful.
EPIC supported CMC's proposals and suggested giving individuals greater control over the sending of pre-screened credit card offers as these are easily intercepted. It also calls for a central identity theft reporting office.
The CMC will draft proposed regulations and hold consultations.