Identity Theft and Ecommerce
Robert Fleming, CeM
President eMarketing Association (www.emarketingassociation.com)

We have been hearing a lot lately about identity theft. Recently, CardSystems, an Atlanta based credit card processor, exposed 40 Visa, Discover, MasterCard and American Express card numbers and security codes to hackers. A recent statistic from Gartner Group speculates that fewer than 1 in 700 identity crimes lead to a conviction. Recent estimates go as high as $56 Billion in identity theft losses. A national publication reported that 60 percent of consumers are unwilling to shop online due to identity theft concerns.

Obviously there is a problem here that concerns all of us. So who really pays the tab for this crime? Fraudulent transactions generally are charged back to the merchants and businesses accepting credit cards, along with fees imposed by the credit card processors, so it is business that takes the brunt of the financial loss. Individuals are protected by laws that limit the amount of financial exposure in fraudulent use of their credit cards. Of course, that is little consolation to those individuals that are denied credit, unable to purchase a house or a car, and in some cases get a job due to the difficult process of trying to correct this criminal wrong with credit bureaus and credit card companies. Closing bank accounts, credit card accounts and trying to correct an inaccurate credit report is a substantial task.

It is possible that the online community of businesses has the largest stake in this latest breech of consumer confidence. It is not that online transactions are unsafe (in fact they may be safer than in person transactions), it is that the public perceives online commerce to be risky.

To counter this impression, business online should do everything possible to protect consumer information, provide relevant privacy safeguards, and assure consumers that their data will be treated with high level of security.

Until Congress acts with legislation that will encourage the financial community to safeguard information, ensure consumer privacy, allow for quick, easy and efficient corrections of credit records, and severely punish those that commit this fraud, the problem is likely to continue. The eMarketing Association encourages everyone to support legislation aimed at curbing identity theft. In the meantime the eMA, will continue to counsel it's member companies, and public to apply best practices to the online transaction process, and ensure the highest level of security for online consumers.

The annual conference of the eMarketing Association in Boston on October 18th and 19th (eM5-East) will explore solutions and best practices for online business to counter identity theft and help assure a more secure online environment. Registration for the event is at:

http://www.emarketingassociation.com/2005/boston/register.htm 

Additionally, eMA members can email service@emarketingassociation.com with questions and comments regarding identity theft solutions and best practices.

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