[extropy-chat] solution to identity theft

Kevin Freels kevinfreels at hotmail.com
Thu Apr 8 14:22:26 UTC 2004

One thing that has changed recently is the implementation of the Patriot
Act. It requires us to get a copy of a photo ID and some other alternate
from a list. (ie. passport, social security card, birth certificate).
Unfortunately, the determination of creditworthiness is made by a review of
the potential borrower's credit report. In order to have a credit scoring
system in place, there has to be a way to "file" everyone into a database in
such a way that John Smith and John Smith can be different people. You could
use addresses, unique identification numbers, or any other type of
number/letter combination that renders each person as a unique individual,
but in the end, that is no different than the current use of the social
security number. Each one of those unique identifier's would be just as
easily stolen.

One option then is to get rid of the credit scoring system altogether, but
that would leave people with fewer options when it comes to borrower (is
this a bad thing?). People would pay more in interest because there is less
competition for the same paper. Each person would have to keep a list of
credit references and keep it current so that it could be provided each time
they apply for credit. Relocating would be tough because creditors in
another town would most likely only accept credit references from verified
banking institutions.

Also, a person could leave out any derogatory credit information and no one
would ever know. A person with three decent credit card accounts, but with
two reposessions, could just leave out the reposessions when they go to
another dealership to buy another car. Because of this, creditors would be
forced to tighten credit guidelines. It would become more difficult for
everyone to get credit, and those who were granted credit would pay more in
interest to offset the defaults.

In short, it would cause a huge slowdown in the amount of borrowing, and in
the US, that means a huge decline in spending. Our system itself needs some
improvement, but I don;t think that the use of a social security number is
the problem. Currently there is a system in place where you can contact the
bureaus and set up a unique PIN which, in theory, prevents anyone from
granting credit unless that PIN is provided. The PIN itself is still subject
to the scruples of  the human beings that take and file the loan
applications, but it does provide a second layer of protection to the

I think that the most important aspect of this is that consumers simply need
to be aware of the risks. They need to shred documents at home with their
personal informatoin. They need to know who they are giving their
information to, and most of all, they need to make regular checks of their
own credit bureaus to make sure that everything is correct.

Kevin Freels

----- Original Message ----- 
From: "Spike" <spike66 at comcast.net>
To: "'ExI chat list'" <extropy-chat at lists.extropy.org>
Sent: Wednesday, April 07, 2004 10:37 PM
Subject: [extropy-chat] solution to identity theft

> extropians,
> Identity theft is said to be growing wildly
> as sleazeballs displaced by cheap and competent
> electronic surveillance systems look elsewhere
> to make a dishonest living.
> To stop the yahoos from stealing and using credit
> card applications, could not the fed simply publish
> *everyone's* social security number?  That would
> at least stop banks from giving out credit based
> on that.  Would it not force them to come up with
> some legitimate means of determining identity?
> spike
> _______________________________________________
> extropy-chat mailing list
> extropy-chat at lists.extropy.org
> http://lists.extropy.org/mailman/listinfo/extropy-chat

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