Evolving Social and Political Debate on Identity Management

1. © Copyright Acxiom Corporation. All Rights Reserved. Evolving Social and Political Debate on Identity Management February 2007

2. Agenda • Terminology • Consumer Perspective • Political Debate • Trends in ID Fraud • Concluding Remarks

3. Terminology Matters • Identity Needs • An Identity I Recognize • A Verified Legitimate Identity • Identity Theft: Do Definitions Still Matter? Payment Cards Center of the Federal Reserve Bank of Philadelphia – August 2005 http://www.phil.frb.org/pcc/discussion/identity-theft-definitions.pdf • Payment Card Fraud • Account Takeover • True Name Takeover • Fictitious Identity Fraud (Synthetic Identity)

4. Consumer Concerns Most Consumers • Security Breaches • ID Fraud (Account or True Identity Takeover) • Pretexting • Spyware, Phishing and Farming Some Consumers • RFID Tags • Frequent Shopper Cards • Cookies • Biometrics • Public Surveillance

5. Consumer Perspective • Convenience almost always wins. • Great willingness to accept surveillance if it provides greater security. • Most are willing to provide sensitive PII in return for real benefits (personalization, discounts, speed, etc.) • High acceptance with the low or no hassle consequences from the loss/theft of a payment card. • Don’t care about fictitious identity fraud. • Much too hard to repair their identity when true name takeover happens.

6. Political Debate • Security Breach Notification Laws • Credit Freeze Laws • Real ID Controversy • Restrictions on Use of Social Security Number • Spyware Bills • Increased Penalties for ID Fraud • Increased Emphasis of Law Enforcement on ID Fraud

7. Research Findings • Cost of ID Theft in 2005 • DOJ estimates $6.4 billion • FTC estimates $9.3 billion • Chief Marketing Officer Council & Business Performance Management Forum • 40% of consumers have stopped a transaction in progress when they suddenly felt uncomfortable because of a security concern • TrustE and TNS US Study • 86% of Internet users believe they know how to protect their PII online • 57% claim to consistently take the necessary steps to do so • However, • 20% read privacy statements • 37% back up important files • 33% change passwords on regular basis • 16% use e-mail encryption • America Online and the National Cyber Security Alliance Research • 25% receive email scams every month that seek to obtain sensitive PII • 74% use their computers to bank, trade stocks or review medical information • 81% of home computers lacked at least one of three necessary protections.

8. Trends in ID Fraud • On the Rise • ID Fraud Committed by Organized Crime • Phishing and Farming • Medical Benefits Fraud (not well known) • Fictitious Identity Fraud (Synthetic Identity Fraud) • On the Decline • Payment Card Fraud • Unknown • True Name Takeover • Spyware

9. Concluding Remarks • Understanding the trends in various types of ID fraud are critical to success, as the solutions for each vary. • This issue is badly misunderstood politically. • There is a lot of dislike for anything resembling a ‘National ID’ in the US. • Consumers want this issue of ID Fraud to ‘go away’ or have quick/easy remedies that hold them harmless (like we have with payment card fraud). • New technologies involving the collection and tracking of PII are growing.

10. Contact me atjennifer.barrett@acxiom.com