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There's no such thing as identity theft, it's all bank fraud or in this case student aid fraud. "Identity theft" is a term coined by banks to try to make it sou

There's no such thing as identity theft, it's all bank fraud or in this case student aid fraud. "Identity theft" is a term coined by banks to try to make it sound like random people should have to deal with the fallout of the banks' bad identity verification practices. If the student aid system verifies identity by, for example, just validating that the applicants know a single 9-digit number that after the Equifax breach should be considered public information, that is a critical problem with their identity verification system and it should be patched.

tacass 1y ago
I’ve long wondered why victims of this fraud don’t more often sue the institutions that granted fraudulent accounts, for any and all damages and cost incurred.
- looofooo0 1y ago
  Read Ross Anderson book Security Eng., it deals a lot with these types of issues. In short, banks try not do anything about as long they do not have to pay for it. I suspect the issue is similar here with the multi stakeholder problem here. The college needs as many paying students as possible, the workload of the staff should be as low as possible, the office giving out loans wants to have a low workload... All in all good scammers will serve all these needs and happily take the money in the process.
- singleshot_ 1y ago
  Well, you’ve come to the right place. When someone tricks a bank in a way that harms you, the legal question governing your recovery from the bank is, “Did the bank act negligently, and did that negligence cause you harm?” Unlike normal life, where “negligent” means “I didn’t enjoy it,” under the law there are several required elements that constitute negligence. One required element of negligence is that for a party’s negligence create liability, the alleged negligent party must have owed the harmed party a duty at the time of the breach of that duty. Duty can arise in several ways according to state common and statutory law. For example, a doctor owes the duty of the standard of care to his patient. A driver owes the duty to drive the speed limit to other motorists. The question of whether duty exists in any situation is a complex question of law. One thing that isn’t complicated, though: in every jurisdiction I’ve researched, a bank owes no duty to a non-customer. This is why victims of identity fraud don’t sue the bank that granted fraudulent accounts: there is no negligence and will this be no recovery. (With the caveat that I’ve seen people who were harmed by a bank where they randomly happened to have an account… in this circumstance, duty can be ascribed to the bank because a banker-customer relationship in which duty is rooted exists). Corollary: open an account at every major bank to establish a duty-relationship everywhere. Poor startup idea of the day: Accounts-at-every-bank-as-a-Service.
nullc 1y ago
https://www.youtube.com/watch?v=CS9ptA3Ya9E https://www.youtube.com/watch?v=CS9ptA3Ya9E Relevant Mitchell & Webb.
- schnitzelstoat 1y ago
  Haha, I'd never heard this. I liked their TV show I should check out the radio stuff.
throwaway2037 1y ago
> "Identity theft" is a term coined by banks to try to make it sound like random people should have to deal with the fallout of the banks' bad identity verification practices. Wow, great point. I admit: I have been tricked by financial institutions to believe this term! Another (US military) term that is similarly misleading to me: "surgical strike". If they blow up the bus stop in your neighborhood with a cruise missile fired from 300km away... well, you won't ever feel safe in that neighborhood again... so the strike is certainly less than "surgical".
- AndrewDavis 1y ago
  Classic Mitchell and Webb skit https://www.youtube.com/watch?v=CS9ptA3Ya9E https://www.youtube.com/watch?v=CS9ptA3Ya9E
- dani__german 1y ago
  surgical in this sense means only blowing up the bus stop instead of leveling 6 blocks with a MOAB. Your feelings about safety are supposed to be negatively affected by a bomb. Whether that bomb is a precise or strategic bomb is immaterial.
  - hedora 1y ago
    In places like Gaza, "surgical strike" often means "only" blowing up the support pillar of an occupied multi-story apartment complex in the middle of the night.
    - dani__german 1y ago
      Whether we believe the lies of the Israeli government is also not quite related to the topic of Surgical vs Strategic Bombing. Clearly Gaza has been subject to the latter though.
mschuster91 1y ago
> "Identity theft" is a term coined by banks to try to make it sound like random people should have to deal with the fallout of the banks' bad identity verification practices. The problem isn't the banks, the problem is that unlike Europe where in most countries it's commonplace for everyone to have a government-issued ID document, the US does not have that requirement and so companies of all sorts abuse documents not meant for that purpose like SSNs or driver licenses that can be trivially forged. Banks can't invent security out of thin air when a significant part of the US population believes that mandating possession of one is a surefire way into a dictatorship or whatnot.
- kasey_junk 1y ago
  About 3% of the us adult population doesn’t have government issued photo id. So if the issue is forgery say so, it’s not a lack of id or a cultural norm against it.
  - username332211 1y ago
    How many billions would a major bank loose in a lawsuit, if they did the sensible thing and refused to deal with 3% of the population?
    - kasey_junk 1y ago
      4.2% of US _households_ are unbanked. Banks refuse customers for many less extreme reasons than “can’t verify identity” which is in fact a requirement for them with all of their federal and state regulators.
    - trelane 1y ago
      Most do. For example: https://www.reddit.com/r/Banking/comments/1csl00q/any_banks_that_dont_require_id_verification/ https://www.reddit.com/r/Banking/comments/1csl00q/any_banks_...
    - nobody9999 1y ago
      >How many billions would a major bank loose in a lawsuit, if they did the sensible thing and refused to deal with 3% of the population? Zero. Because FINCEN/KYC[0] laws in the US mandate identification for all customers. Which means that at least 3% of the populations is "unbanked"[1]: Some reasons a person might not have a bank account include: Lack of access via a nearby bank branch or mobile phone Minimum balance fees Distrust of the banking system, typically due to lack of transparency regarding fees and deposit timing[1] No access to government-issued ID, which is required to open a bank account To avoid delinquent debts, such as creditors seizing the account in judgements, or the government collecting back taxes or child support [0] https://www.investopedia.com/terms/k/knowyourclient.asp https://www.investopedia.com/terms/k/knowyourclient.asp [1] https://en.wikipedia.org/wiki/Unbanked https://en.wikipedia.org/wiki/Unbanked Edit: Fixed subject/verb agreement (laws/mandate)/fixed quote formatting.

tacass 1y ago

I’ve long wondered why victims of this fraud don’t more often sue the institutions that granted fraudulent accounts, for any and all damages and cost incurred.

looofooo0 1y ago
Read Ross Anderson book Security Eng., it deals a lot with these types of issues. In short, banks try not do anything about as long they do not have to pay for it. I suspect the issue is similar here with the multi stakeholder problem here. The college needs as many paying students as possible, the workload of the staff should be as low as possible, the office giving out loans wants to have a low workload... All in all good scammers will serve all these needs and happily take the money in the process.
singleshot_ 1y ago
Well, you’ve come to the right place. When someone tricks a bank in a way that harms you, the legal question governing your recovery from the bank is, “Did the bank act negligently, and did that negligence cause you harm?” Unlike normal life, where “negligent” means “I didn’t enjoy it,” under the law there are several required elements that constitute negligence. One required element of negligence is that for a party’s negligence create liability, the alleged negligent party must have owed the harmed party a duty at the time of the breach of that duty. Duty can arise in several ways according to state common and statutory law. For example, a doctor owes the duty of the standard of care to his patient. A driver owes the duty to drive the speed limit to other motorists. The question of whether duty exists in any situation is a complex question of law. One thing that isn’t complicated, though: in every jurisdiction I’ve researched, a bank owes no duty to a non-customer. This is why victims of identity fraud don’t sue the bank that granted fraudulent accounts: there is no negligence and will this be no recovery. (With the caveat that I’ve seen people who were harmed by a bank where they randomly happened to have an account… in this circumstance, duty can be ascribed to the bank because a banker-customer relationship in which duty is rooted exists). Corollary: open an account at every major bank to establish a duty-relationship everywhere. Poor startup idea of the day: Accounts-at-every-bank-as-a-Service.

nullc 1y ago

https://www.youtube.com/watch?v=CS9ptA3Ya9E https://www.youtube.com/watch?v=CS9ptA3Ya9E Relevant Mitchell & Webb.

schnitzelstoat 1y ago
Haha, I'd never heard this. I liked their TV show I should check out the radio stuff.

throwaway2037 1y ago

> "Identity theft" is a term coined by banks to try to make it sound like random people should have to deal with the fallout of the banks' bad identity verification practices. Wow, great point. I admit: I have been tricked by financial institutions to believe this term! Another (US military) term that is similarly misleading to me: "surgical strike". If they blow up the bus stop in your neighborhood with a cruise missile fired from 300km away... well, you won't ever feel safe in that neighborhood again... so the strike is certainly less than "surgical".

AndrewDavis 1y ago
Classic Mitchell and Webb skit https://www.youtube.com/watch?v=CS9ptA3Ya9E https://www.youtube.com/watch?v=CS9ptA3Ya9E
dani__german 1y ago
surgical in this sense means only blowing up the bus stop instead of leveling 6 blocks with a MOAB. Your feelings about safety are supposed to be negatively affected by a bomb. Whether that bomb is a precise or strategic bomb is immaterial.
- hedora 1y ago
  In places like Gaza, "surgical strike" often means "only" blowing up the support pillar of an occupied multi-story apartment complex in the middle of the night.
  - dani__german 1y ago
    Whether we believe the lies of the Israeli government is also not quite related to the topic of Surgical vs Strategic Bombing. Clearly Gaza has been subject to the latter though.

mschuster91 1y ago

> "Identity theft" is a term coined by banks to try to make it sound like random people should have to deal with the fallout of the banks' bad identity verification practices. The problem isn't the banks, the problem is that unlike Europe where in most countries it's commonplace for everyone to have a government-issued ID document, the US does not have that requirement and so companies of all sorts abuse documents not meant for that purpose like SSNs or driver licenses that can be trivially forged. Banks can't invent security out of thin air when a significant part of the US population believes that mandating possession of one is a surefire way into a dictatorship or whatnot.

kasey_junk 1y ago
About 3% of the us adult population doesn’t have government issued photo id. So if the issue is forgery say so, it’s not a lack of id or a cultural norm against it.
- username332211 1y ago
  How many billions would a major bank loose in a lawsuit, if they did the sensible thing and refused to deal with 3% of the population?
  - kasey_junk 1y ago
    4.2% of US _households_ are unbanked. Banks refuse customers for many less extreme reasons than “can’t verify identity” which is in fact a requirement for them with all of their federal and state regulators.
  - trelane 1y ago
    Most do. For example: https://www.reddit.com/r/Banking/comments/1csl00q/any_banks_that_dont_require_id_verification/ https://www.reddit.com/r/Banking/comments/1csl00q/any_banks_...
  - nobody9999 1y ago
    >How many billions would a major bank loose in a lawsuit, if they did the sensible thing and refused to deal with 3% of the population? Zero. Because FINCEN/KYC[0] laws in the US mandate identification for all customers. Which means that at least 3% of the populations is "unbanked"[1]: Some reasons a person might not have a bank account include: Lack of access via a nearby bank branch or mobile phone Minimum balance fees Distrust of the banking system, typically due to lack of transparency regarding fees and deposit timing[1] No access to government-issued ID, which is required to open a bank account To avoid delinquent debts, such as creditors seizing the account in judgements, or the government collecting back taxes or child support [0] https://www.investopedia.com/terms/k/knowyourclient.asp https://www.investopedia.com/terms/k/knowyourclient.asp [1] https://en.wikipedia.org/wiki/Unbanked https://en.wikipedia.org/wiki/Unbanked Edit: Fixed subject/verb agreement (laws/mandate)/fixed quote formatting.