Willton writes “Daniel Solove highlights a paper written by Chris Hoofnagle about how one of the reasons identity theft happens is because companies have made the economic decision to let it happen.

In the post, Solove compares the identity theft situation to the famous case involving an accident due to a defect in a Ford Pinto, in which it came to light that Ford knew about the design defect in the car but ignored it because it calculated that paying damages in lawsuits would be less than fixing the design flaw.”

Of course, in the case of the Pinto, the scandalous cost-benefit analysis in question led to 27 deaths, whereas identity theft, at least, hasn’t resulted in anyone’s death (hopefully). However, there is a significant cost to the victim in time, mental anguish, and inconvenience, none of which ever really hits the bottom line of the company involved. That said, since the Identity Theft Enforcement and Restitution Act was passed in 2007, it is now possible to sue scammers for the time and effort spent to repair one’s life after identity theft. If there is gross negligence on the part of a company that contributes to identity theft, perhaps a future class action lawsuit over this issue is not too far off.

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