Monday, April 03, 2006

Identity Theft - A real growth industry

While working as an R&D Manager at Visa in the mid-nineties, I had the chance to do a lot of thinking about payment systems, identity, trust, security - all the things that have to be present for value to be exchanged between parties.

Visa was heavily involved with the then newly emerging field of public key cryptography as a way of enabling payments on the Internet. The problem was that the systems being proposed, such as SET (Secure Electronic Transactions), were hopelessly complex to use and to implement.

Thinking about the societal implications of using certificates and computer stored identity,
I was concerned about the confusion of value transfer with identity. Why do you have to know who I am in order to accept payment for goods? I also became increasingly concerned about the potential for identity theft and false accusations.

If everyone agrees that an identity method is secure, then there is a natural tendency to assume guilt if the method says a person is involved. As we have seen with fingerprints (not unique after all), DNA (not unique, but statistically significant), and biometrics (easily fooled by Jello), it is dangerous to rely on technology to ascertain identity to the exclusion of all other factors.

My major concern about storing one's identity in a computer, or chip, or cellphone is what happens when it is stolen. Indeed, the fact that identity is available to be stolen guarantees that it will be. No amount of encryption mathematics is going to prevent misuse by the average customer who fails to safeguard what has now become the key to his entire identity and by implication, wealth.

The kind of nightmare that can ensue was covered by the Hollywood flick "The Net", in which the protagonist is targeted and has her identity stolen. While the technology depicted in the film is somewhat Hollywood over-the-top, it does give the flavour of what it would be like to try and function in society when your identity has been removed and you essentially lose access to your own life.

Which all leads to the recent release of a report by the Department of Justice, Bureau of Justice Statistics in the US, entitled
"Identity Theft, 2004".

It appears that the identity theft industry has grown, and continues to grow, quite nicely. The press release for the BJS report says it best -


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