“As every individual, therefore,
endeavour as much as he can both to employ his capital in the support of
domestic industry, and so to direct that its produce may be of the greatest
value; every individual necessarily labours to render the annual revenue of
other society as great as he can. He generally, indeed, neither intends to
promote the public interest, nor know how much he is promoting it. By
preferring the support of domestic to that of foreign industry in such a manner
as its produce may be of the greatest value, he intends only his own gain, and
he is in this, as in many other cases, led by an invisible hand to promote an
end which was no part of his intention. Nor is it always the worse for the
society that it was no part of it. By pursuing his own interest he frequently
promotes that of the society more effectually than when he really intends to
promote it” (see footnote 1).
On the 10th of November 2006 ,
mid-term elections in America U.S.
In a bid to satisfy
“public interest”, the Republicans I guess never did make anything of Alexis de
Tocqueville when in 1831 he said, “no sooner do you set foot upon American
ground than you are stunned by a kind of tumult; a confused clamor is heard on
every side and a thousand simultaneous voices demand the satisfaction of their
social wants”. Certainly, politicians and policy makers propose new
legislations designed to make society a better place and make us better people.
But, all policies have consequences, which they are hoped to achieve. However,
in many cases, legislation brings other consequences that were neither intended
nor desired by those who supported the law. And sometimes, laws don’t even
achieve the goals they were meant to bring about.
For example, everyday,
global consumers receive offers that just sound too good to be true. In the
past, these offers came through the mail, or by telephone. Now, the con artists
and swindler have found a new avenue to pitch their frauds – the internet. The
on-line scams know no national borders or boundaries; they respect no investigative
jurisdictions. But, as with all scammers, they have one objective – to separate
you from your money! In several cases, even your life. Legislators are crying “there
oughta be a law!” Laws to protect public interest from these thieves and
fraudsters. But, how do these enacted laws affect our behaviour in both
predictable and unexpected ways in a society where order is existent in human
affairs.
In what many are calling America
Identity theft is a
criminal offense. It occurs when a person knowingly transfers or uses, without
lawful authority, a means of identification of another person with the intent
to commit or to aid or abet any unlawful activity that constitutes violation of
federal law or that constitutes a felony under any applicable state or law.
Identify fraud is digging into a consumer's pockets – around $221 billion by the
end of 200, tripling to an incredible $2 trillion by the end of 2005 (see
footnote 3). The British economy alone, suffers a loss of £1.3 billion per
year. The knock-on effects are not limited to financial loss – it can take
victims up to 300 hours of effort to regain their credibility with banks and
credit reference agencies. Terrorist attacks could also be on the offing.
The number of identity
theft victims and their total losses are probably much higher than reported.
It’s hard to pin down, because law enforcement agencies may classify identity
theft differently – it can involve credit card fraud, internet fraud or mail
fraud, among other crimes. The perpetrator may use a variety of tactics to
obtain your personal information and drain your finances: posing as a loan
officer and ordering you credit report (which lists lines of credit); “shoulder
surfing” at the ATM or phone booth to get your PIN code, “dumpster diving” in
trash bins behind businesses or apartments for unshredded credit applications,
cancelled checks, bank records or any documents containing personal
information; or, stealing mail right out of your own mailbox.
An interesting point about
theft is that it is a crime in which you decide whether to participate. Hanging
up the phone or not responding to shady mailings or e-mails makes it difficult
for the scammer to commit theft. But con artists are very persuasive using all
types of excuses, explanations, and offers to lead you – and your money – away
from common sense.
If producing, smuggling
and peddling drugs were the crime of the 20th century, identity
theft is the crime of the 21st century. While fighting the trade is
now high on the agenda of most governments, identity theft is still to get the
importance it deserves. In many countries around the world, it is yet to become
even a cognizable offense. In some, the laws that exist to fight identity theft
are hardly adequate. Even in the U.S. U.S. Europe
is not left behind. Despite such low legislative action, the laws in place and
those in the process of gaining ground are continuing to push for prevention,
by enhancing the penalties for any individual who steal an identity and uses
that false identity to commit any one of a number of serious crimes.
Furthermore, laws such as the Data Accountability and Trust Act (DATA) move for
stricter security measures to protect consumer information; and the Fair and
Accurate Credit Transactions Act of 2003 (FACT) make room for consumes to order
free credit report (consumer pull). However, the Identity Theft Prevention Act
of 2001 and Identity Theft Prevention Act of 2002, does not only help victims
of identity theft correct their records but increase penalties by as much as
five years for identity theft for the purpose of committing a terrorist act.
This became clearer when
Nigerian born Jide Komolafe, 31, became one of the first people in the U.S. February 2, 2006 to five and
half years of prison (see footnote 4).
On the contrary, the
“imperious immediacy of interest” (see footnote 5) attached to thee laws result
to profiling, unexpected protests against these legislations, strain to hi-tech
security and further injury to, and complication of victims’ and would-be
victims’ plight. While terrorists like Ahmed Ressam are caught because like
him, they would be ‘hinky’ (see footnote 6), others like the alleged “American
Taliban” John Walker Lindh and British “shoe bomber” Richard Reid would have
committed their intended crime before being caught. This is because profiling fails.
To profile, is to generalize. It is taking the characteristics of a population
and applying them to an individual. Profiling works better if the
characteristics profiled are accurate. But ethics aside, profiling fails
because most real fraudsters are overlooked. Active failures will be much more
common than passive failures. Timothy McVeigh eluded arrest while law enforcement
searched for Arab suspects, and DC snipers John Muhammad and Lee Boyd Malvo
continued on a killing spree while officials looked for “a white man in a white
van.” The greater majority of people who fit the profiles will be innocent.
Brazilian electrician Jean Charles de Menezes, killed by the British police on July 22, 2005 was no more
armed than the police officers themselves (see footnote 7). At the same time,
some real fraudsters are going to deliberately try to sneak past the profile.
Although “consumer pull”
from credit bureaux has no effect on credit, and consumers entitled to
“freezing” their credits and fraud “alerts”, these measures deal with identify
theft only after it has happened and not before – a case of bolting the stable
door after the horse has been stolen. Freezers can interfere with the
credit-issuing process, can be technically difficult to implement and can carry
a cost that may be passed on to consumers. And although these credit monitoring
options are available at no-out-of-pocket expenses (some customers could still
see it. As another way for the bureaux to enrich themselves more), it can’t
prevent identify theft but can reduce only the impact.
Strains in hi-tech used for
the latest encryption, consumers screening and data security technologies, is
more likely certain than expected. This is because however the hi-tech security
measure, humans will still beat computers at ‘hinkiness-detection’ for many
decades to come. Even institutionalized profiling is bound to fail – these
fraudsters would have done their homework in identity faking.
Taxpayers also face a risk
of identity theft, in legislations that allow tax preparers sell personal
information of taxpayers with permission (see footnote 8) making room for tax
preparers to produce a separate piece of paper of webpage requesting permission
to describe personal information, is only going to make room for identity theft
under the nose of identify owners and credit bureaux. Protesters are also going
to stand on the fact that some legislations would fail to correct possible
privacy and technical loop holes in attempts to save would-be victims from
theft.
But however the
consequences of legislations, the law is still one key institution that makes
the co-ordination of a (free) society possible. It is a code that has evolved
not at the hands of politicians but in the decision of judges. According to
Tocqueville, “the spirit of the law which is produced in the schools and courts
of justice gradually penetrates beyond their walls into the bosom of society,
where it descends to the lowest classes, so that at least the whole people
contract the habits and tastes of the judicial magistrate”. The law is
respected because it is based on rules that have been tested in real life, and
because the values and the spirit of the law are closely connected to the moral
values of civilization.
The moral framework for
human society is not set in stone neither is it in the self-interest of legislators,
which have become a “basic value” for the enactment of these laws, but rather
is constantly changing as new rules are discovered that allow the social order
to function better. Life can be hard because it forces individuals to adjust to
the needs of others. The society works because it coordinates conflicting
desires by creating incentives for people to satisfy their own wants by
satisfying those of others. And the hum of commerce eases the path of social
cooperation, in part because it offers man opportunities that are simply not available
when acting alone. Incentives allow us to cooperate with others even though our
views on political issues or our religions beliefs may differ.
“It is not from the
benevolence of the butcher, or the baker, that we expect our dinner, but from
regard to their own self-interest”.
FOOTNOTES
1.
A quote from notable economist Adam Smith in his book, The
Wealth of Nations. In an article entitled “Unintended Consequences”, Rob Norton
makes reference, to Smith’s understanding of unintended consequences in
economic reality — that people do act in their own
self-interest and not public interest; while he did not argue that
self-interest is always good, he has beneficial effects on the community.
2.
Known as Social Security Number in the U.S. , Sweden and some
countries; National Insurance in the U.K. or just Pension Number in some other
countries, a pension is a steady income given to a person, made in the form of
a guaranteed annuity to a retired or disabled employee. The program name could
differ and vary but, it still focuses on the same aim.
3.
According to the Analyst house, Aberdeen Group, this is only
an estimate of loss, in global terms. This shows that possible financial loss
greater than reported, is being suffered by victims to identity thieves.
4.
Komolafe opened accounts at both Citizens and Charter One
banks in the name of other people, made fake deposits and then withdrew money
with a debit card. He was also convicted of bank fraud and identity theft. When
he was arrested on 2nd
August, 2004 , Komolafe had his possession, identifying information
including social security numbers of 68 people.
5.
According to Rob Norton in his “Unintended Consequences”,
Robert K. Merton referred to instances in which an individual wants the intended
consequence of an action so much that he purposefully chooses of ignore any
unintended effects. That type of willful ignorance is very different from true
ignorance.
6.
On 14th
December, 1999 , Ahmed Ressam tried to enter the U.S. Victoria Island ,
British Columbia Los Angeles International
Airport Strait
of Juan de Fuca , at Port
Angeles , Washington
7.
Jean Charles de Menezes, 27, was a Brazilian electrician
living in Tulse Hill, in South London . Menezes
was shot and killed a Stockwell Tube Station on the London Underground by
unnamed Metropolitan Police officers. Police later issued an apology, saying
that they had mistaken him for a suspect in the previous day’s failed bombings
and explosions, and was unconnected with the attempted bombings.
8.
In December 2005, proposed changes on tax laws were announced
in the U.S.
