Blog 4

Blog Prompt

This week's blog should revolve around the concepts of credit-based identities and identity theft. Consider the many recent credit bureau and other online security breaches, and how identities have long been tied to consumer credit. You are welcome to blog about anything that struck you particularly from the readings in this module. Consider, in particular, the concepts of performativity, cultural scripts, nature vs. nurture, the consumption of identity, and contextual performances of self.

What is Identity Theft?

Identity theft is the process of having one's consumer credit-based identity stolen. What does it mean that we, as individuals, have a consumer credit-base identity?

Consumer and credit-based identities are part of our virtual or digital economy. This also means part of our identity exists in digital and online spaces, and this isn't an identity we have full control over. There are many institutions and mechanisms that interpret our identities and attach a monetary value to that version of self.

Among the more prominent of these institutions in shaping our consumer and credit-based identities are the credit bureaus, particularly Equifax, Experian, and Transunion. Entire industries have developed that help individuals maintain some element of control over how these entities report out our credit-based identities. Somewhat ironically, in using the services that have developed to help protect our credit-based identities, we pay money to protect our ability to have access to money and loans. Yet, these industries tend to privilege some social categories more than others (Aldén & Hammarstedt, 2016; Greer & Cavalhieri, 2019; Marcelino-Aranda, Marcelino, & Jasso, 2020; O'Brien & Kiviat, 2018).

Historically, particular types of identity were more likely to benefit from the credit system:

As with any set of organized commercial relationships, biases and prejudices were and are baked into the credit bureaus’ rules and the kinds of information they gathered. Being black, being gay, being a single woman or having strong political opinions  ― prior to 1970,  all of these things could make it much harder to get a job, secure credit, get a loan, buy insurance or fend off a police investigation. During World War II, credit reporting agencies sustained their businesses by running loyalty checks for the military ― and that relationship continued after the war. Tens of millions of Americans were subject to background checks for both political and private reasons. (Stoller, 2017).

In running background checks, credit bureaus used to be able to ask a person's neighbors and acquaintances about an individual, and this information could all be included in credit reports. By the 1970s, when these reports started being shifted to computer-based record keeping, Congress became interested in determining the need for monitoring credit databases. As the credit card industry expanded, the influence of credit-based identity reporting and control also expanded. Thus, the Fair Credit Reporting Act of 1970 became the first federal law regulating data-based identities for US Citizens.

Today, because of the overall use of credit cards in US society, credit-based identities are key to how an individual is able to progress through many social systems:

The fact that certain ethnic groups have higher loan denial rates and are charged higher interest rates on their loans is consistent with what has been found in previous research from other countries. There are several plausible explanations for these results. Explanations may be found in differences between immigrant and native firm characteristics that we not have been able to control for in our study. As mentioned above, another explanation may be that non-European immigrants are more likely to apply for bank loans. A further explanation might be found in the occurrence of ethnic discrimination in the market for bank loans in Sweden. (Aldén & Hammarstedt, 2016)

Current studies reveal that many US employers use credit reports and scores when determining qualified applicants for employment opportunities. Significantly, this continues even though most research in business and management studies shows that credit history has little or no impact on workplace outcomes (Aldén & Hammarstedt, 2016; Greer & Cavalhieri, 2019; Lauer, 2017; O'Brien & Kiviat, 2018). This means, your expected performance is tied to your credit-based identity. This also influences how many employers therefore are less likely to hire female and non-white candidates, as credit reporting systems remain problematically biased.

Add to this the problems associated with computer hacking, identity theft, and security breaches involving these identities. Online and dark web spaces currently act as marketplaces for stolen identities (Laurer, 2017; Steel, 2019). Digital currencies which are difficult to track have increased the marketability of these stolen identities while also lowering their prices so that more individuals can purchase an identity more easily. Some researchers argue that the inherent inequities of the credit-based identity system also play a role in increasing the desire for marketable identities (Lauer, 2017; Marcelino-Aranda, Marcelino, & Jasso, 2020).

References

Aldén, L., & Hammarstedt, M. (2016). Discrimination in the Credit Market? Access to Financial Capital among Self-employed Immigrants. Kyklos, 69(1), 3–31.

Greer, T. M., & Cavalhieri, K. E. (2019). The role of coping strategies in understanding the effects of institutional racism on mental health outcomes for African American men. Journal of Black Psychology, 45(5), 405-433.

Lauer, J. (2017). Creditworthy: A history of consumer surveillance and financial identity in America. Columbia University Press.

Marcelino-Aranda, M., Marcelino, D. M., & Jasso, G. S. F. (2020). Caja de ahorro informal, una opción de autoapoyo económico en sectores de bajos recursos. Nova Scientia, 12(24), 1–26. https://doi.org/10.21640/ns.v12i24.2264

O’Brien, R. L., & Kiviat, B. (2018). Disparate impact? Race, sex, and credit reports in hiring. Socius, , doi:10.1177/2378023118770069

Steel, C. M. (2019). Stolen Identity Valuation and Market Evolution on the Dark Web. International Journal of Cyber Criminology, 13(1), 70-83.

Stoller, M. (2017, September 13). Equifax isn't a data problem. It's a political problem. Huffington Post. https://www.huffpost.com/entry/equifax-credit-bureaus-reform_n_59b95627e4b0edff97187e7d

Don't Forget

• Don't forget to complete two responses to your peers, and in those responses don't just agree or disagree. Instead, consider the following:
  • challenging their choices
  • asking questions
  • giving examples
• Use citations and references, where appropriate