As far as scary identity-theft stories go, the one on the front page of last Tuesday’s New York Times was sure to leave many readers cowering under their covers . . . especially those living in Arizona. According to a survey cited in the story, one in every six Arizona adults has been the victim of identity theft sometime in the past five years.
According to a survey cited in the story, one in every six Arizona adults has been the victim of identity theft sometime in the past five years. Local law enforcement blames a booming methamphetamine trade coupled with a credit-card industry that has lost its collective mind and thinks nothing of scattering preapproved plastic across the countryside like confetti.
“There’s a disconnect between corporate leadership at financial institutions and their security departments,” says Brad Astrowsky, a former prosecutor quoted in the Times story. “Marketing people are ruling the day in banking. They can do things to fix the problem, but they have no incentive and motivation to do it. Preventing something from happening is a cost. What’s the benefit? It’s hard to quantify.”
Guess that depends on whether your identity has been swiped or not. And while I personally question the soundness of that alarming one-in-six statistic, it’s certainly fair to say that identity theft continues to climb the charts among those property crimes we have come to most fear.
A personal anecdote in support of that last contention: Recently I was on the horn with my insurance agent buying coverage for the new home we are purchasing (a process unpleasant enough to make me wish someone would steal my identity for at least the duration). Generally speaking, insurance agents who depend on selling me extras to make their monthly quotas will fare poorly at bonus time, as I am one of those risk-tolerant, less-is-more types.
So when the agent mentioned that I could purchase $15,000 worth of protection against identity theft for an additional $25 premium it surprised me no end to hear the words “Yes, I’ll take that” tumbling from my mouth. (It was an easy “No, thanks” on the earthquake and flood coverage.)
Maybe I got ripped off – that’s always my suspicion when buying insurance – but I had experienced one too many brushes with identity theft (canceled credit cards, the whole bit) and read one too many horror stories even before flipping open last Tuesday’s Times.
And apparently I am not alone. Network World reader Ed Martz offered this account in response to a Buzzblog item I wrote on my insurance purchase:
“I was offered a similar rider when my homeowner’s policy was renewed last month, and I did exactly the same thing as you,” Martz writes. “I have tried to be very careful with my identity, but I do know that given how often security seems to be compromised lately, chances are good that the crooks can get their hands on it anyway. I know that most fraudulent credit card purchases would likely not be charged to me in the event, but I’ve seen the stories of folks who have had to make good.
“It seems to me that the real loss to an individual in an identity theft is the damage to one’s financial reputation (i.e. credit score), and I’m not sure if that can be repaired with this insurance,” he continues. “Still, $25 seems cheap enough for at least some peace of mind. I have no idea if it’ll be worth it, and truthfully, I really don’t ever want to find out.”
He’s got that right. If someone swipes your car or TV set, that sucks, but identity theft is different in that it is a crime that keeps on giving. As I understand the insurance coverage, it would be earmarked for putting back together the pieces of my financial reputation should the need arise. Would that happen in real life? I honestly have no idea, but the promise and peace of mind, however illusory they may prove to be, seemed worth $25 at the time.
Any thoughts about identify-theft insurance? Buzz@nww.com is the address.
