Identity Theft Solution

2007-04-19

Identity theft is a serious problem in the world today. It seems like anyone can get a little personal information about you and then run up a pile of debt in your name. Trying to fix your credit after such an incident is a nightmare. Well, there is something simple that reduces the likelihood of this happening in the first place, and it's not so much a new law as it is a reemphasizing of an existing legal concept: the burden of proof.

If Al, over at Old Whig, loans money to Dave at Bugbear and Dave doesn't pay it back, AL has to go to the police to complain. The first thing the police are going to ask is, "Do you have any proof?" If Al doesn't have any proof, the police are going to laugh at him and tell him to get out before they kick his ass.

What if Al does have some proof? What if he has an IOU signed by Dave. Dave or his attorney are going to say that it is not Dave's signature and Al still has to make an effort to prove it.

About the only things that are going to save Al is if there are witnesses, photo or video evidence of Dave signing the IOU, Dave's finger prints all over the IOU, or some other very solid proof. If Al is lucky, Dave was drunk enough to tell the whole bar that he is borrowing from Al, as well as stand in front of the security camera.

Credit card companies don't have this problem. They send random offers out for credit cards. People throw these offers away. Bad guys get the discarded offers, change the addresses, and apply for a credit card in your name. Then the bad guy buys stuff with the new credit card and refuses to pay. The credit card gets tired of sending automated bills and just reports your name to the credit bureaus claiming that you're a deadbeat.

What can you do when this happens? Not a whole lot, the burden of proof is on you. You have to prove in court that you did not purchase all those erotic massages. The credit card company knows that an upstanding citizen like you is more likely to pay than the crook is, so they go after you. They have attorneys on staff. You have to go out and get one at your own expense.

As you can guess, this sort of thing sucks with a great vacuous-ness. It's like some blind guy is tossing money in the wind and the police believing him when he says some of it blew your direction. It would seem that there is little we can do. That's usually the case, but we have to try anyway. Contact your legislators and push to have the burden of proof put back where it belongs.

That's right, if credit card companies are going to insist on handing out card to every anonymous envelope that enters their buildings, then the lost cash is there problem and not every one else's. It is their responsibility to prove that you used their card, not the other way around.

"How are we supposed to do that?" they demand.

Well, I know my bank doesn't do anything for me without looking at my ID first. At my local branch, they won't even cash checks for somebody unless that person leaves a thumb print. Credit card companies are supposed to be financial institutions. They will just have to start taking pictures and finger prints to prove that you are the person to whom the card was issued. If they don't have anything so definitive, then they have no proof.

Sure, this will cut down on the number of credit card offers that arrive in the mail of barely literate people who do not really understand what the card is. It will also mean that only the more respectable credit card companies are likely to turn a profit, due to the costs of setting up branch offices. They will probably have to team up with banks or similar institutions.

Most importantly, when an identity theft occurs and you go to court over the problem, the judge will ask the credit card company if they have any proof, they had better have some.