Is danger of identity theft overblown?

May 23, 2006

The announcement yesterday about the loss of personal electronic data on up to 26.5 million veterans is the latest in a string of similar reports about information security breaches at major institutions in the last two years. These reports have heightened public concern about the risk of identity theft, which often is referred to in media reports as "the nation's fastest-growing crime."

Though these incidents are troubling and new threats may yet emerge, the danger of identity theft is being overblown by the press and politicians, according to Indiana University law professor Fred H. Cate. Cate, the director of IU's Center for Applied Cybersecurity Research and a recognized expert on information privacy and security, cites recent data available from government, industry and academic studies that demonstrate that identity theft is not being fueled by information security breaches. The studies suggest that identity theft is actually declining, not increasing, Cate said.

"The risk to consumers of most breaches is not as great as popular rhetoric suggests, and only a small percentage of breaches actually involve any harmful use of data," he said. "There is plenty of reason to be concerned about data security breaches and about identity theft, but the link between the two is often overblown by politicians and the press."

"The real danger," according to Cate, "is that we become so focused on activities that don't pose a real risk to consumers, that we ignore those that do."

Source: Indiana University