Combatting Identity Theft: A Proposed Ethical Policy Statement and Best Practices

• Published date: 01 September 2017
• Author: Dinah Payne,Pamela A. Kennett‐Hensel
• DOI: http://doi.org/10.1111/basr.12121
• Date: 01 September 2017

Combatting Identity Theft:

A Proposed Ethical Policy

Statement and Best Practices

DINAH PAYNE AND PAMELA A. KENNETT-HENSEL

ABSTRACT

The purpose of this article is to explore the law related

to identity theft, to review corresponding rights, and

responsibilities of stakeholders involved in identity theft

and to formulate a system of best practices businesses

could engage in to prevent or reduce identity theft threats.

Utilizing two ethical frameworks based on deontological

approaches, the authors conclude that there should be

a well-defined management scheme to prevent identity

theft, which is easy to comprehend and comply with for

all stakeholders. Our proposed management scheme

incorporates both legal and ethical elements such that

identity theft will be more difficult. Further, our proposal

would also address business entities’ practices that are so

careless that identity theft is made possible at all or made

easier: ethical business practice can do much to reduce

or eliminate identity theft.

Dinah Payne is a Professor of Management at Department of Management & Marketing, Col-

lege of Business Administration, University of New Orleans, New Orleans, LA. E-mail:

dmpayne@uno.edu. Pamela A. Kennett-Hensel is a Chairperson, Chase II Professor of Market-

ing at Department of Management & Marketing, College of Business Administration, University

of New Orleans, New Orleans, LA. E-mail: pkennett@uno.edu.

V

C2017 W. Michael Hoffman Center for Business Ethics at Bentley University. Published by

Wiley Periodicals, Inc., 350 Main Street, Malden, MA 02148, USA, and 9600 Garsington

Road, Oxford OX4 2DQ, UK.

Business and Society Review 122:3 393–420

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INTRODUCTION

It seems that not a week goes by without some breaking news

report regarding identity theft. Whether it is customer data

being stolen from large retailers such as Target (Finkle 2014),

U.S. government employee records being hacked (Mick 2015), a

data breach at the South Carolina Department of Revenue (Cheney

et al. 2014a), or even the Ashley Madison debacle (Ellin 2015),

examples abound. Identity theft covers a large range of illegal activ-

ities. It is defined as “the unauthorized use or attempted use of an

existing account, such as a credit or debit card, checking, savings,

telephone, online, or insurance account (Harrell and Langdon

2013, p. 1).” It is also defined as the use of “personal information

to open a new account, such as a credit or debit card, telephone,

checking, savings, loan, or mortgage account (ibid, p. 2).” Finally,

identity theft is defined as the “misuse of personal information for

a fraudulent purpose, such as getting medical care, a job, or gov-

ernment benefits; renting an apartment or house; or providing

false information to law enforcement when charged with a crime or

traffic violation (ibid, p. 2).” While some authors have indicated

that consumer action designed to protect their privacy constitutes

the most cost-effective “way” to combat identity theft, others have

wondered where the burden should fall when criminals steal vic-

tims’ identities and even further engage in the crimes associated

with such theft (Sullivant 2009).

Sullivant (2009) describes two sets of identity theft victims, the

individual whose identity is stolen and the individuals/entities that

are recipients of fraudulent information. For instance, consider the

consumer of financial products: the consumer of mortgage services

may be denied a mortgage altogether or be required to pay a higher

than realistically necessary interest rate because of the thief’s

destruction of a good credit record. Further, the lender may be

denied the opportunity to lend funds to someone qualified to

receive them or improperly charge a higher rate to a good credit

risk, thus damaging the financial entity’s long-term viability as a

lender.

Even easier to comprehend on an immediate personal level,

three victims of identity theft are involved in the fraudulent use of

a credit card: the person whose information is stolen and subse-

quently used to pay for goods or services, the merchant who

394 BUSINESS AND SOCIETY REVIEW