Identity theft is the fastest growing crime in America, with businesses and consumers losing billions of dollars each year to identity thieves.
Stolen personal and financial information is used to make unauthorised purchases, open fraudulent credit and bank accounts and access government services in the name of unsuspecting consumers. In addition to the staggering financial costs, ID crime contributes to passport fraud, counterfeiting, forgery, money laundering, mugging and burglaries -- and 9/11 added terrorism to that list.
While consumers are aware of the words "identity theft", they have little knowledge about how the crime is committed. They turn to banks, credit card companies, retailers, airlines and other businesses to protect them. Businesses across the country are scrambling to re-examine the way they think about identity fraud prevention. This is a great first step; in the past, many businesses considered identity fraud losses to be just another cost of doing business, and felt no responsibility for consumers who were victimised. But with so many new fraud prevention solutions, how do businesses choose the one that balances their own business needs and the interest of their customers?
Is biometric tech the answer?
In recent months, a wide variety of technology solutions have been introduced to battle ID theft. Biometric technology such as fingerprint identification and retinal scanning create great buzz, but are they cost effective? Do they actually work? Can they be implemented in real-world situations?
Consumers want protection from identity fraud, but practical implementation requires a secure, convenient and seamless experience, whether shopping, boarding an airplane or entering a screening checkpoint for a government building. Privacy is a significant issue as well.
Businesses have legal and moral responsibilities for collection and use of personal information. Crooks are more sophisticated, and organised criminal enterprises involvement has increased. Finally, consumers don't want to sacrifice convenience for security, nor do businesses want complicated new procedures that confuse clerks and inhibit transactions. Neither businesses nor consumers want to bear the financial burden of increased security or loss-prevention technologies.
Measured against these requirements, current biometric technology falls short. Most forms of biometrics rely implicitly or explicitly on cooperation by the consumer, rendering them vulnerable to fraudsters. Fingerprints require readable fingers; facial and eye scans require visible, undisguised facial features. As use of biometrics grows, criminals are learning that strongly worded objection will usually get them out of the most sophisticated biometric screening process and into a highly vulnerable "legacy" system.
On the other end of the spectrum, honest consumers want assurances of privacy, consistency and reliability. Litigation costs must also be considered for users who are incorrectly singled out by the system and prevented from completing their transaction.
