The Jewel of Their Souls: Preventing Identity Theft Through Loss Allocation Rules

Abstract:     
Identity theft is a serious problem, and one that is getting worse. Existing statutory attempts to prevent it have not succeeded. The article argues that traditional loss allocation rules offer a model for addressing identity theft. If credit reporting agencies and creditors were liable for the losses caused when they report the transactions of identity thieves as the transactions of consumer victims, they would have greater incentives to take steps to prevent identity theft. In addition, firms in the credit industry are better able than injured consumers to spread the losses from identity theft among those who benefit from credit.

Number of Pages in PDF File: 66

Accepted Paper Series