There's a solution: personal liability for the executives and managers at the company, and for the investors.
For example, every person who has ever worked for IDScan at any level of management should have all lifetime compensation clawed back and then pay a further 2x of that in fines. All VCs in the company should face personal liability up to 10% of their net worth. (Fines should be based on net worth; see e.g., https://www.nytimes.com/2018/03/15/opinion/flat-fines-wealth...)
I've always found it absurdly awkward to give companies personhood AND have them unable to be put into prison. I prefer how director level in EU seems to have some big responsibility.
"personal liability for the executives and managers" at which company?
What's stopping IDScan from "delegating" the storage to another company so they're no longer liable for stolen data? If Company A uses IDScan and the storage of the ID info is handled by Company B, do I have standing to demand compensation for damages from Company B when my data is stolen after I agree to let Company A verify my ID?
BTW this is how accountability is being avoided today.
> What's stopping IDScan from "delegating" the storage to another company so they're no longer liable for stolen data?
You can't really delegate the liability to a vendor. Of course in current world it means nothing since there is effectively no liability anyway, but if we're dreaming of a world where there is liability, you can't delegate it. You can delegate the operation, but not the liability.
The company is responsible for vetting their vendors so they meet their requirements. Today that is done with a silly dance of exchanging SOC2 reports and such, which means nothing. But if there was actual personal liability for the board and executives, that would change in a millisecond.
I think IDScan is still responsible for. You don’t typically go after hosting providers for failures like this, right?
Or are you referring to the practice of using shell companies to obfuscate responsibility? In that case, I think there’s history that says IDScan would still be responsible, questionable legal business nonsense be damned.
if company A does a piss poor job at auditing and vetting their vendors then company A shares a proximate responsibility billable and criminally liable to say 50% of the damages (along with company B for accepting a contract they were not able to fulfill)
I think the best way to prison reform is to start jailing execs who inflict mass suffering via process decisions en masse. maybe then Sergey Brin will decide to drop a quarter billion in something other than opposing a wealth tax
If someone steals my identity, and puts me in a position where "I" owe money that I didn't borrow, NONE of that money paid back will come from my pocket.
The government can figure out who should owe it, but it sure as hell isn't me.
I think in the same way part of our paycheck goes to federal taxes, part of our paycheck should go towards funding an insurance for the financial impacts these sorts of events, commensurate with the total compensation of a person, and adjusted each year for the growth of any stocks granted to that person.
I'm sure there are edge cases and operational details that need to be figured out with that idea, but at the end of the day if a company is directly or indirectly responsible for awful things, the executive and senior leadership should feel the impact more than others, financially and/or criminally.
Liability doesn't fix the damage that is already done. We can punish all the people involved in this, and it will still be the case that your drivers license is available for purchase and identity theft against anyone is now much easier. They don't have enough enough to repair the damage they've caused, even if we take everything from them.
The damage can't be undone, but you can learn from it and prevent these things from happening again and again. If every CEO truly believes that his personal wealth and freedom is at stake with the safety of his customers' personal data, they will see that ITsec becomes a cornerstone of the company instead of an annoying compliance sheet checkbox.
There are quite a few people who murder despite the risk of incarceration. I would love a system that approaches it more like: "you've lost trust of this civilization to act in good faith, and now you will be contained in a way that can rebuild that trust, and you will not be allowed to re-enter this civilization until you have indeed rebuilt that trust."
Yep, and the understandable fear/worry/expectation/knowledge of that possibility happening, is part of the reason that (usually) stops that cycle from starting in the first place.
The only time it's worked is in El Salvador and it was because they arrested the 2% of the population who had the potential to be murderers and have so far thrown away they key. I imagine before too long they will also have a final solution to the problem of feeding them for the next 50 years.
> All VCs in the company should face personal liability up to 10% of their net worth
Unless you have a requirement to also use domestic ID-verification services, this just means you shut that sector down in the U.S. and all our scans go to a country that doesn't extradite.
The solution is simpler: you're not allowed to hold certain special categories of data. ID scans, until we get proper identity verification in America, being one of them.
This is a little harsh. What about requiring companies to carry management liability insurance? Or to list individual managers on cybersecurity insurance policies? Premiums will rise when a company employs managers with claims history. Eventually, it becomes difficult to employ them in key positions if they have a bad track record.
Holding actual people liable sounds like a more effective option. The insurance would just be included into the cost of doing business and make everything more expensive. Insurance makes everything worse.
Holding actual humans liable (with appropriate levels of harshness) would make actual humans more likely to take preventative steps. Holding shareholders somewhat liable (maybe extra taxes on sales of a companies stock) might be useful also.
Sarbanes-Oxley in the US holds top management personally responsible too, and compliance is taken far more seriously than with other regulations as a result.
The incentives are to price risk correctly so that they can price their policies cheap enough to beat the competition while not going out of business from paying more in claims than they receive in premiums.
There is a cap to how much and insurance company can make (health insurance for instance are capped at 20% of premiums). To make more money next year they can sign up more policy holders or make sure costs go up. Companies also often have a large stake in the fix it shops/clinics/hospitals so they recoup much of their cost that way. Market capture, if it cost more to buy insurance than to fix it/absorb the cost without insurance why would you buy insurance. It is useful for the insurance companies to see costs increase.
Sure there can be good arguments for having insurance. Insurance companies are part of the financial sector and will be working to make more money. That is a fine incentive for the insurance industry but for the insurance consumer it is a reason to be skeptical and careful.
Are we talking hypothetical utopia or something that could actually happen? Insurance probably isn’t the most perfect solution but it’s the most feasible. These exact policies and insurers already exist.
And why the hell would anyone want a job where a mistake results in personal ruin? Sure, there are a lot of shitty companies and people running them, but mistakes also happen when people are trying to do a good job. It’s not possible to completely prevent a data breach even with an unlimited budget.
I think the best solution is to weed out the people who behave irresponsibly and have an environment where we learn from the ones who are responsible and fail anyway.
Very true. If you don't want to be exposed to such rich, you're free to work elsewhere. No one is forcing you to take on these jobs that immiserate society.
The most reckless will, of course; but most people won't -- they just won't do it.
Corporations evolved the liability structure they have today so that large undertakings, where many people have to work together and where the bad deeds of a small number of those people could sink the undertaking, were something that regular -- people who can't self insure -- could be a part of, as investors, managers, staff, &c, &c.
Limited liability may make accountability too narrow; but blanket personal liability makes it far too broad. It's not a solution for running a large, complex economy in a more accountable way.
And 70 years ago I would agree with you, but now we have a handful of individuals who are the economy with wealth that's rivaling nations. Something has gone awry.
Yes, there are some people who thrive on risk and will do things like jump off a mountain in a wing suit just for the thrill of it. That doesn't mean making that sort of personal recklessness legally mandatory for employment is a good idea.
This sort of personal liability OP is proposing would just ensure the security industry is dominated by highly compensated compulsive gamblers because nobody else is insane enough to take the risk. It's an absolutely ridiculous idea.
Could we not keep the same "harsh" plan, and then let others provide and purchase such insurance on their own? Why does the insurance have to be mandated?
Because the company will file bankruptcy and nobody will get anything. Requiring insurance up front at least provides some coverage for liabilities.
It's why you can't legally drive without insurance. It's not for you or your car, nobody cares about that. It's for the other people and their property.
Nobody is talking about criminal wreckless driving.
We're talking about assurances that you're going to be able to cover damages if you rear-end a sedan and cause $8,000 in repairs. That's why you're required to drive with insurance coverage.
The company typically receives the payout to cover losses from whatever incident precipitated the claim. This isn’t hypothetical. Companies already do this. For example, a company could get hacked and extorted for ransom. They can file a claim and use the payout to pay the ransom. Or a manager makes a mistake that results in a lawsuit, settlement, defense costs, etc. The company can file a claim against a management liability policy.
What’s new that I’m proposing is to require companies to carry insurance and list accountable people on the policies so that claim history is associated with their decisions. Many companies already have management liability and/or cybersecurity policies, but it’s typically optional and individual decision makers aren’t listed on the policy. The claim history is associated only with the company and never the people who made the decision. That’s why they can just leave and do the same thing somewhere else.
And when the hacked information is used to cause a national-level disaster, the costs of which are greater than the assets of the insurer, and their re-insurance funds, bankrupting them, what then?
Insurance is not a solution for everything.
More critically, just because a company buys insurance, it should not be a get-out-of-jail-free card for the executives and management to feel free to manage data irresponsibly.
It is really simple:
If they can not handle properly the risks of their business, they should be in another business.
Any data stored anywhere can be exfiltrated through either social engineering, or computer hacking.
Make it illegal to have this data, and if they really want it, then you hit them with jail when it leaks, not fines that can be paid by the board in the form of a golden parachute.
Only those that absolutely need data like this should store it. Like, I dunno, the government? Everyone else can rely on zero knowledge proofs or literally anything else than forever storing a scan of someone's entire fucking identity.
We need people to stop internalizing that the government and the rich somehow deserve access to private data just because they want to use it. Seeing a way to make money using enough to make you entitled to it.
Force businesses to add value if they want to exist instead of extraction or rent seeking.
They are, by deciding if they are able to handle having their lives certainly ruined if they screw up. The trick to punishment as deterrence to planned actions is 100% identification and enforcement, so that people will avoid the behavior to avoid the punishment. Anything less and some people will decide the potential payoff of success is worth it.
Reality and certainty of consequences, not evasion and insuring of liability
I specified it in the last sentence:
>>If they can not handle properly the risks of their business, they should be in another business.
The same way it is handled in any other business or trade with risk.
Make sure the risks are also PERSONALLY CONSEQUENTIAL TO THEM.
If they fail to handle the business with state-of-the-art advanced knowledge, intelligence, diligence, and resources, then they will face serious personal consequences. If they do not want to take that risk, they are free to go work in any other business.
Some people are fine taking the risks of subsea welding or windmill maintenance. Others are not, and are free to pursue other work. The risks for fuking-up there include sudden death and life-changing injury.
It should be the same for people risking the livelihoods of every person who's data they handle — if they fuk-up badly enough, their risk should be financial bankruptcy and prison.
Instead, white-collar work is typically organized so those who fckup get a promotion or just find a new higher-paying job, while the people they screwed over are left to deal with the consequences.
This is data that will be relevant for every single victim for decades to come and they will pay for this regularly, and it cannot be undone.
What amount per person is acceptable for a thing that simply should never happen?
I don't think "this will ruin my and my bosses life"-levels are over the top at all. Don't wanna risk it, then don't store the data. Usually for most purposes it would be e ough to store that yes, someone has a legit drivers license, which types of vehicles it is for and how long it is valid (if there is a limit).
We don't get to this kind of data reduction if people don't see data as the liability it sometimes is for their customers.
That's right: no legal basis exists now. The proposal is to create such legal basis.
And if "No large undertaking could ever function with such broad exposure to liability" - that would be great, i think we would prefer that such firms doesn't exists.
> that would be great, i think we would prefer that such firms doesn't exists
They stop existing within your jurisdiction. Also, the idea that the public would go along with any of this for this issue is silly. Let's start with crimes that actually cost lives.
All the better, I've long suspected that these companies are collecting this data and selling some portion of it. Having this category of business entirely disappear sounds like a solid win to me.
Something much more targeted is appropriate there. Maybe we need a regulatory framework where people own their own data. Make it impractical, expensive and burdensome to hold personal data you don't absolutely need.
That has nothing to do with changing the whole approach to -- really undermining the whole idea of -- corporations. Limited liability is the only way they can work. It's a cornerstone of every developed economy.
Corporate officers can already be held individually liable for some things. This would just add another one, it wouldn’t be undermining the whole idea of corporations. If individuals can be held personally liable for their company’s failure to pay payroll taxes and corporations still manage to exist and do business, then I don’t see why this would be so different.
I’m not quite sure how to answer that. The situation I have in mind is the one described in the bit you quoted. A company doesn’t pay legally required payroll taxes, then depending on circumstances, corporate officers may be personally liable for them. See: https://www.irs.gov/irm/part5/irm_05-017-007
IRM 5.17.7 (https://www.irs.gov/irm/part5/irm_05-017-007), is about corporate officers who have a duty "...to account for, collect, and pay over..." taxes and failed to perform that duty.
I don't think this is at all similar to jsrozner's solution, which is to assign liability to "...every person who has ever worked for IDScan at any level of management...".
The IRM is describing officers with culpability as individuals whereas jsrozner is really proposing to do without any individuate consideration of wrongdoing at all.
Restitution is the legal basis, let's not act like the rich don't force the poor to pay for their civil violations. What it sounds like is the rich don't like it when the law is applied fairly to them too.
It seems like there is something specific to this that you are missing.
Holding all managers personally accountable for actions of a corporation runs up against the legal structure of a corporation -- a legal structure that is definitely not one of joint and several liability. That is what I mean when I say there is no legal basis for it. The whole point of a corporation is that the corporation is liable (which is a great convenience in many respects).
Restitution is not about who is liable but about making a wrong right. It's a different layer.
Fines exceeding 100% of lifetime compensation might actually do something. As it stands, clawbacks are ineffective — for example, Carrie Tolstedt of the Wells Fargo scandal wound up money ahead to the tune of tens of millions of dollars:
> In response to the report, Wells Fargo retroactively fired Tolstedt for cause and revoked $47.3 million that they had previously paid her. This brought the total amount of money she had given up to $67 million, or about 54% of her $125 million pay package she initially received when she retired.
Unfortunately "knowingly act inappropriately" is going to be tough to prove. I think it's better to pin the responsibility onto the top executives unless they can prove that it was a specific bad actor despite systems put in place to prevent that. Otherwise, it's too easy for execs to ignore privacy and security concerns just because they are not familiar with that side of things.
We should also make it much easier for company employees to whistle-blow or even initiate stringent audits of security and privacy.
The socialized losses vastly exceed 300% of earnings - they're analogous to a company mishandling toxic waste and ruining everyone around them. The way they are running their business is catastrophically irresponsible, and if they can't afford the consequences, they shouldn't have gone into this business.
I've got bad news for you jsrozner, John down in accounting at <your employer> did something very unethical last week. So you, jsrozner, a first level manager in customer support who has never even met John, are going to jail for a decade and all lifetime compensation will be clawed back.
No, this is a NOW problem, not a future one and it will take months if not years to fully understand the impact. We need a NOW solution not prevention. Training AI on all the images and data here will facilitate a class of identity theft we may not have ever seen. This cannot just be abut prevention.
Investors benefit from company gains despite not having encouraged or mandated some decisions that enabled the gains. So it makes sense that they also get exposure to the downside.
They already get downsides if company gets fines or even goes to bankruptcy. You never know whether they invested based on information that was not true at all. Which is unfortunately too common.
It sounds like they need additional exposure then as they aren't assessing the real risks and seem to have completely ignored them. Why should society care that some group of investors didn't do their homework? Is that the excuse we use to avoid prison sentences now?
There are many, many cases where investors are misled by companies -- this falls under the (very broad) heading of securities fraud and it's easy to find documented cases of it. It's not a question of doing their homework.
There is literally no way to have the broad base of investment in markets by members of the public that we see today if investors incur personal liability. It was and remains one of cornerstones of any commercial society.
jsrozner for president.
Again... just imagine the cost of say replacing the SSN and each and every one of the licence drivers in the US... JUST IMAGINE THAT COST PAID FROM THE TAXES YOU PAID, and again by you because it's not free... so it's leaked all over again in 1 month because there is no way "to incentivize these guys to jail" fast enough.
It's done and works that way because the deterrents are 1% of the income of the company.
People need to stop believing insane, delusional things like the existence of a human being with a certain name, address, phone number, birthday, SSN being secret or private information.
Downstream of that, people need to stop accepting knowledge of the basic public metadata fields or possession of images containing them as evidence of identity verification. Do actual public key cryptography on the internet or check biometrics and the document’s physical security measures in person.
Or, we could introduce a software building code, the way we have codes for every other kind of safety-impacting product. But apparently software is never unsafe, we never need to protect people from software systems, and definitely shouldn't pass a law requiring those systems be protected adequately, with legal consequences for not doing so.
Even though software has been around for a while now, it does still seem to be evolving rapidly enough that a fixed code is a bad idea. Remember password change requirements that were terrible, but stuck around for 20 years before being removed from the relevant voluntary code (I think something from NIST)?
NIST creates the standards that businesses must follow when doing business with the Federal Government. Without those standards, the government's operations would be even more unreliable and haphazard than they are today.
A long time ago they mandated a single password policy, because having thousands of agencies all with different password policies was crazy. At the time, they (and the industry) thought it was a good policy. Some people suspected otherwise, but there was no proof to show that a change was necessary. So academic research was undertaken to find whether the policy was helping. The research showed that it was more harmful than helpful.
Academia proposed a solution, NIST considered it, and then adopted it, in 2017. The language they used in 2017 was "flexible", so nobody really had to change. Finally in 2025 they made the language mandatory. Now the affected companies will be forced to abandon their crappy password policies, specifically because they aren't allowed to keep them anymore, if they want those lucrative contracts.
This should not just apply to the Federal Government. The same reasons FedGov needs these standards applies to every single one of us. The tech lobby has successfully fought this for years, and politicians are scared of introducing something that might negatively impact public citizens (and thus risk the politician's job). But they can't deny that FedGov needs these standards.
This is a pretty normal process. The electrical code, building code, fire code, etc, all take time to change. But the changes do happen, and we all reap the benefits. With no code at all, we would be experiencing a lot more death, injury, financial loss, and inconvenience.
And btw, there is a lot of technology that has not evolved much in 40 years. We don't need to make everything absolutely perfect, and every aspect 100% set in stone, in order to have a code. Every other code is updated regularly. Software code can change too. (Or are software people too incompetent to figure it out? I might agree with that...)
It's a failure story of regulation because the regulation was bad, and took forever to get changed.
I don't mind if government software has to use Dual_EC_DRBG - let the government hack itself. I do care if you get prison time for using a secure random number generator.
If you add in personal liability for mistakes, nobody competent will ever bother working in the industry again. It's not worth the personal risk. You'll get stuck with bottom of the barrel staff who don't have much to lose and get a steady paycheck for a few years.
You do realize the limited liability corporation was a key innovation that unlocked the Industrial Revolution, right?
Companies definitely respond to fines or liability. They just need to be big enough.
For example, I recently heard an interview from an environmentalist who expected to be outraged touring a Chevron drilling location but was surprised by how much precaution is taken these days. Basically, liability for oil spills is massive. We could just make data leak liability massive too.
That works for Chevron because they have enormous assets to lose.
In the ID company case, there simply aren't enormous assets available, despite enormous damage being possible. As such, we really need to re-think just how much we limit liability.
Perhaps it's time to stop allowing degenerate gamblers to freeroll their risks... perhaps it's time to start zeroing out investors, so that they have to start behaving responsibly.
> personal liability for the executives and managers at the company
How cute, you think the engineers who failed to properly develop and maintain a system that can securely store sensitive information flawlessly won't (or shouldn't) be held accountable.
Every time this topic comes up it makes me wonder how many people on here who go "wow how in this day and age is it possible to have a data breach???" aren't just extraordinarily lucky that no one is really trying to attack the service they created or are fortunate enough to work in the few places that can legitimately say they're nigh-impenetrable.
It's time for us to stop pretending that YC checks do anything except provide an illusion of security while putting people's living in danger.
AI makes it trivial to generate fake documents, so most KYC checks can't actually be trusted to verify your identity. As an example of how ridiculous things have gotten, Anthropic launched their verification program for granting access to their Mythos models. North Korea are experts at bypassing KYC checks and were granted early access while the rest of us were locked out.
These leaks are constant and largely unavoidable. Even the largest, most trusted companies in the world get regularly hacked. My passport was leaked and I've received multiple blackmail attempts from people demanding I pay a ransom. There have been multiple kidnappings that have been related to home addresses and private information being leaked.
The situation is really bad, and there are no easy solutions. The correct answer is probably a new government ID system based on public key encryption with some sort of multi-sig between the individual, the government, and your parents (until you're 18). This won't be easy to roll out, but our current system is broken beyond repair. Unfortunately, things probably need to get way worse before anyone cares enough to fix it.
> Even the largest, most trusted companies in the world get regularly hacked
Yes, they do. Fundamentally this is because they don't spend enough money on security (like basically everybody else).
Some form of personal liability for executives is one (relatively simple) way to ensure that this becomes a priority, like SOX did for financial reporting.
There are other ways, but I do like the personal liability approach as its targeted, and has been used successfully in the past.
So if I steal someone's private key I can be them and nobody can refute that I'm them? And the government retains a record of everything you ever do? How's that any better than the present state of things?
The interesting question is how to verify who someone is before issuing them a digital ID. Estonia verifies people using their Estonian ID cards, their mobile devices, or biometric data if they have it recorded.
The system is only as strong as its weakest link. ID cards can be faked and mobile devices can be stolen. Biometrics can't be easily faked, but they're horrible to have leaked because you can't change your fingerprints or eyeballs if compromised.
Near the beginning of my career, I talked to a greybeard who harrumphed at me discussing something-or-other and said "computer security is an oxymoron". I thought he was being too pessimistic, nowadays I realize he was right.
That's too pessimistic. But it is a spectrum. You can't guarantee 100% success against 100% of potential attackers, but it still matters how easy it is to get into something. There's a pretty big difference between a Windows 95 machine hooked directly to the internet and something like a fully up-to-date iPhone. The iPhone is still hackable, but in practice it's so difficult that you're unlikely to be targeted unless you get the attention of a national government.
It also requires actually caring about security and putting effort into it. These data breaches are usually systems where little attention was paid to security in the first place, and e.g. getting ahold of one user's password is enough to lose the game. Getting companies to care about security is really hard, but it does happen.
Real computer security IS possible but takes a lot of effort by very skilled and dedicated people. You don't hear about bank mainframes getting hacked often.
Skilled and dedicated people and an organization dedicated to maintaining a consistent level of security. Maintaining both of these long term seems to be the challenge for many companies.
My point was that computers are as secure as human(s) who programmed them were careful and competent. Computer security is ultimately human knowledge and reasoning competence (plus time/money tradeoffs, if made willingly)
I'm reminded of the OPM breach back in 2015 [0]. Practically everyone that even applied for a security clearance was compromised. In addition, millions of sets of fingerprints were recovered by the entity that carried out the hack.
Elon fucking Musk has literally every single piece of personal information of every person in the country. It’s so far past too late for any of this to matter.
I’m not sure how we start over but this data plus LLMs is gonna make it a full time job to keep your parents from sending every penny to a scammer.
What I would love to know is who is selling my info. I get texts from all kinds of politicians but I didn't know who sold them my number. Seems like selling someone's property without their approval should be illegal. It'd be great if I could request who sold them my data, then go to that entity tell them to stop selling (rinse and repeat)
> What I would love to know is who is selling my info.
Car dealerships. Heck, even the DMV. Sign up for Credit Karma? Enjoy credit card offers arriving to your house. It seems everyone is "in" on selling/sharing our data. If you ever read the terms of services, you'll usually see a "third party partners", or something like that, which mentions how they "share" your data.
Most of these companies are themselves data harvesting scams. You have to give them all your data so they know what to delete. Then they sell that data.
Its unfortunate that the security requirements are expected from the for-profit businesses when the cost of paying penalties for breach of security is way lower than actually implementing the security.
Ironically in case of breach they just sell you another of their product where you put your personal information again
The CRAs compete for breach business, because it's absolutely a profitable enterprise for them:
How many people actually sign up for your "free credit monitoring for a year" following a breach?
When you do, you typically do so by signing up for the highest tier (sometimes $30 or even $50 a month) product with a redemption code for one year free. You have to enter a credit card to do so, and to no-one's surprise, if you don't cancel in time, it automatically converts to a paid subscription "for your convenience".
There are many consumer protection farces in the US, but right up there has to be the notion that "identity theft" is the consumer's responsibility/obligation to prevent or resolve, not the entity that actually had the data stolen. You're considered liable until you prove innocence, even though you did nothing wrong.
This very nearly burned me when buying my home - having been an AT&T customer in the PNW for nearly two decades, "I" apparently decided to hit up a Walmart on the outskirts of El Paso, sign up for a Verizon service, run up two months of international calls and bail out.
Despite a police report, my utility statements, AT&T bills, etc. (all of which were, to be blunt, none of VZWs business), VZW stood by it initially, "On review of your documentation, we remain satisfied that this debt belongs to you based on the documents used to open your account".
I asked to see them, since they were, in VZW's own words, "mine". "We can't, for customer privacy reasons." Oh, so "mine when the bill needs paid, may not be mine for privacy purposes".
Was ran through the same gauntlet by a medical provider billing me for services. Insurance wouldn't pay them due to "insufficient documentation". Wouldn't disclose what documentation they had received or what documentation they needed. Just that is was inadequate. Service provider wouldn't tell me what they had sent.
Somehow a few hours before our court hearing they by some miracle decided to settle the debt with no fee to me.
> the notion that "identity theft" is the consumer's responsibility/obligation to prevent or resolve, not the entity that actually had the data stolen.
You may enjoy/find-useful this Mitchell & Webb radio-skit [0] of a conversation between a banker and a visiting customer.
American national security apparatus do not care about the actual Americans. They are too worried about foreign entanglements, and protecting a specific foreign country than their own country.
I'd rather tackle this problem from a different angle. If a bank gives a fraudulent loan to someone in your name, its YOUR problem and not the bank's problem. Why don't we make it the bank's problem? They gave the fraudulent loan. How is it not their problem to fix?
If we fix that, then having your ID stolen is a much, much smaller problem.
It's probably related to "the optimal level of fraud in a financial system is not zero" and reducing false positives would make way harder for everyone to get loans, which is bad for both banks and consumers.
In my experience, any industry following a security standard halts all effort at security once they're compliant with the standard. HIPAA sets a minimum but seems to also guarantee you will get exactly that minimum and nothing better.
I'm confused about the read on this too. It reads like a "I don't want the government involved in my healthcare" type of statement, but it's posted in the discussion section of an article about private companies mishandling data.
I'm glad to see this keep popping up. It gets pushed down, very quickly, when it does.
I suspect the reason for that (nothing other than a "gut feeling" that I get, seeing the story pushed off the front page so quickly, every time), is that the breach was through a backdoor that was deliberately coded into the system, for TLA use, and what happened, is exactly what people keep warning about; it got breached, and is now a "front door," and The Powers That Be don't want that examined too closely.
The breach is bad no doubt-- but this information was already readily available to bad actors e.g. via Lexis Nexis. Practically all states sell DL and registration information to information brokers, and the remaining ones require you to obtain auto insurance, and the insurers all sell the information.
Many people pretend this isn't happening because of the "The Drivers Privacy Protection Act" but the DPPA is paper thin protection at best as it has a long list of permitted uses which anyone can just lie about (and are you worried about threats from parties so honest they're unable to lie?). Not that they usually have to lie given that the permitted uses include "For use by licensed private investigation agencies" and "For the bulk distribution of surveys, marketing materials, or solicitations"... In practice this just means accessing the information costs a little money and requires someone check a "this is for a permitted purpose" checkbox. The biggest impact is that it causes abusers of the information to be circumspect about their sources, which helps maintain the data-harvesting status quo.
(Guess what: the same databases also have ALPR gathered pictures of your car at whatever locations its been in public view... stores, your home, your mistresses home... Makes flock (YC S17) look pretty mild by comparison. The fundamental sin is requiring ID without also making it a crime for anyone but the owner and issuer to posses someone elses ID information.)
In some sense the IDScan breach may (ultimately) improve our privacy and security because it will break people out of the FALSE belief that this information is private, or that it can be protected by anything short of restricting its collection in the first place.
Ia also wonder just how hard it is to figure out the info someone’s drivers license from scratch. My license has:
- license number
- license class
- license issue date
- license expiration date (birth day and month in my state)
- birth date
- eye color
- sex
- height
I think if I was targeting you specifically, probably not, most of these details would be apparent upon seeing you. But, would you be comfortable if I had these details on a card with my photograph? Highlights a risk around ease of credit applications etc.
Right on! It's always frustrating reading articles framed in terms of "security breaches" and "dark web", invariably doing hand waving at unspecified harm, when the real threat actor for pretty much everybody is the "above board" surveillance industry. Random people who buy this info outside the law can't really hurt me - it's not like I'm a witch and my DL# is my "true (system-given) name" and I disappear when they say it or something. Rather the parties who can hurt me are the ones who pretend knowledge of this semi-public information is an authentication system, and then hassle me with legal nastygrams when they get defrauded. Or who keep comprehensive dossiers on my behavior to unaccountably sort me into corporate-defined boxes so they can better extract my wealth and otherwise form anti-competitive arrangements against me. These actual attackers operate mostly according to the (very broken) law, and they are what needs fixing. Not just scaremongering when some bogeyman "wrong people" get a small taste of the exact same information.
There were times when the words “national security” made rules and laws magically evaporate. Now that total surveillance is already here, companies and agencies can have it for close to free, and nobody gives a rat's ass for rules and laws anyway, national security is no longer needed.
Hundreds of millions of American's names, addresses, social security numbers, etc were in the NPD leak which has been publicly downloadable. The idea that any of this information should be considered private, only knowable by the person themself is wrong.
When this first landed I asked what the fix could even be. Everyone needs a new ID at a minimum. But then I got to thinking: 1) is that the point? Conspiratorial thinking I know but “hey all
Our ids got hacked I guess we need a national id”. And related 2) the current id system from a security standpoint was a band aid fix for outdated world to be shoehorned into a modern one. IDscan was never cryptographic proof you were who you said you were. Maybe better than “enter your name and SSN” but bottom line, at least in US there is no cryptographically secure identity system that proves you are the citizen you say. And that fact bleeds into all sorts of patchwork solutions, fraud, etc. Moreover there are serious philosophical hurdles to getting to one. I’m not even positive I want one. But unless there is some zero-trust way to do this, I’m not sure what the fix would be.
And then, in real life, one discovers that institutions route around in creative ways for all sorts of different reasons ( recently had to 2fa a transaction at a god damn teller window; you just took my DL ).
Yes, but it is rather pointless to argue with teller who can't even begin to understand policy dictating it, much less, apparently, make exceptions. Machine told me to do it.
No, the teller is not sufficiently qualified to be liable enough to match the picture on the ID to the person in front.
The 2nd factor is the phone number on file, which offloads liability for errors in that mechanism to the phone company.
The goal is to reduce the amount of decisions the teller makes, so as to reduce the amount of errors they can make, which also reduces the amount of training they need, all of which reduces costs.
It’s really interesting how the lack of US federal government stepping in to provide an official electronic identity verification API has resulted in the mobile phone networks becoming the de facto arbiters of identity. Even for government services.
I don’t even think I could trust having my phone number on someone else’s mobile phone plan, as I would want to ensure I have as much control over it as possible.
> IDscan was never cryptographic proof you were who you said you were. Maybe better than “enter your name and SSN”
With the benefit of hindsight, we'd have all been better off if SSNs had been so obviously flagrantly public that nobody would ever consider them a trust-factor.
Right, I don't blame the SS administration, they knew what people shouldn't do and warned everyone about it... the problem was private companies were desperate for security-theater and were never punished as they built an entire grand opera-house of insecurity.
Yep. Social Security numbers are not guaranteed to be unique, and for a very long time, were pretty easy to figure out if you knew roughly when a person was born and where.
"I know! We'll use this number that its issuing agency says is most definitely not to be used for identification purposes for identification purposes!" is real PHB thinking.
But they were! My college student ID from 1980 has my SS number right on it. I have here an employee badge from the Walt Disney Company from 2000 and my SS number is in a bar code right on the bottom. Even in 2000, it would be trivial to take a photo of someone wearing the ID badge and decode the 1D bar code on it.
Right, but somehow a bunch of companies still made them into a "prove who you are" factor, and (if we assume incompetence instead of malice) that means a bunch of decision makers still considered the a trust factor.
There's a solution: personal liability for the executives and managers at the company, and for the investors.
For example, every person who has ever worked for IDScan at any level of management should have all lifetime compensation clawed back and then pay a further 2x of that in fines. All VCs in the company should face personal liability up to 10% of their net worth. (Fines should be based on net worth; see e.g., https://www.nytimes.com/2018/03/15/opinion/flat-fines-wealth...)
I've always found it absurdly awkward to give companies personhood AND have them unable to be put into prison. I prefer how director level in EU seems to have some big responsibility.
Why would the law bind those who it was made to protect?
Sounds like the system is working as intended.
Snark aside, I agree with you, it’s messed up and there is a better a way.
"personal liability for the executives and managers" at which company?
What's stopping IDScan from "delegating" the storage to another company so they're no longer liable for stolen data? If Company A uses IDScan and the storage of the ID info is handled by Company B, do I have standing to demand compensation for damages from Company B when my data is stolen after I agree to let Company A verify my ID?
BTW this is how accountability is being avoided today.
> What's stopping IDScan from "delegating" the storage to another company so they're no longer liable for stolen data?
You can't really delegate the liability to a vendor. Of course in current world it means nothing since there is effectively no liability anyway, but if we're dreaming of a world where there is liability, you can't delegate it. You can delegate the operation, but not the liability.
The company is responsible for vetting their vendors so they meet their requirements. Today that is done with a silly dance of exchanging SOC2 reports and such, which means nothing. But if there was actual personal liability for the board and executives, that would change in a millisecond.
I think IDScan is still responsible for. You don’t typically go after hosting providers for failures like this, right?
Or are you referring to the practice of using shell companies to obfuscate responsibility? In that case, I think there’s history that says IDScan would still be responsible, questionable legal business nonsense be damned.
if company A does a piss poor job at auditing and vetting their vendors then company A shares a proximate responsibility billable and criminally liable to say 50% of the damages (along with company B for accepting a contract they were not able to fulfill)
I think the best way to prison reform is to start jailing execs who inflict mass suffering via process decisions en masse. maybe then Sergey Brin will decide to drop a quarter billion in something other than opposing a wealth tax
two birds, one stone as they say
Potentially, all of them.
If someone steals my identity, and puts me in a position where "I" owe money that I didn't borrow, NONE of that money paid back will come from my pocket.
The government can figure out who should owe it, but it sure as hell isn't me.
I think in the same way part of our paycheck goes to federal taxes, part of our paycheck should go towards funding an insurance for the financial impacts these sorts of events, commensurate with the total compensation of a person, and adjusted each year for the growth of any stocks granted to that person.
I'm sure there are edge cases and operational details that need to be figured out with that idea, but at the end of the day if a company is directly or indirectly responsible for awful things, the executive and senior leadership should feel the impact more than others, financially and/or criminally.
It's not identity theft - it's bank robbery, and the bank is trying to pin it on you: https://www.youtube.com/watch?v=CS9ptA3Ya9E
Liability doesn't fix the damage that is already done. We can punish all the people involved in this, and it will still be the case that your drivers license is available for purchase and identity theft against anyone is now much easier. They don't have enough enough to repair the damage they've caused, even if we take everything from them.
The damage can't be undone, but you can learn from it and prevent these things from happening again and again. If every CEO truly believes that his personal wealth and freedom is at stake with the safety of his customers' personal data, they will see that ITsec becomes a cornerstone of the company instead of an annoying compliance sheet checkbox.
> Liability doesn't fix the damage that is already done.
Neither does imprisoning murderers for life, but it's one heck of a deterrent.
There are quite a few people who murder despite the risk of incarceration. I would love a system that approaches it more like: "you've lost trust of this civilization to act in good faith, and now you will be contained in a way that can rebuild that trust, and you will not be allowed to re-enter this civilization until you have indeed rebuilt that trust."
We'll probably never get there.
There are quite a few people who murder despite the risk of incarceration.
I hate to think how many people would kill if it were not illegal. Think about that. Then tell me its not a deterrent.
Easy to figure out when looking back into history and past times where that was accepted even as means to sort out honour issues or bar fights.
Not a lot of people, because if you went and murdered someone, their family (if they have any) would presumably just murder you in turn.
That would make it a lot of people, then. Because now your family murders their family and their family murders your family.
Yep, and the understandable fear/worry/expectation/knowledge of that possibility happening, is part of the reason that (usually) stops that cycle from starting in the first place.
I have no doubt that it can be a deterrent for some. The question is more about whether this is the optimal strategy for addressing the problem.
The greater deterrent is knowing you will be caught.
The only time it's worked is in El Salvador and it was because they arrested the 2% of the population who had the potential to be murderers and have so far thrown away they key. I imagine before too long they will also have a final solution to the problem of feeding them for the next 50 years.
Liability can be a strong incentive to improve the system in the future.
The alternative now is the damage not being fixed and there being no ramifications/punishment
No, but it changes the cost-benefit analysis for managers deciding to cut corners in future.
> All VCs in the company should face personal liability up to 10% of their net worth
Unless you have a requirement to also use domestic ID-verification services, this just means you shut that sector down in the U.S. and all our scans go to a country that doesn't extradite.
The solution is simpler: you're not allowed to hold certain special categories of data. ID scans, until we get proper identity verification in America, being one of them.
This is a little harsh. What about requiring companies to carry management liability insurance? Or to list individual managers on cybersecurity insurance policies? Premiums will rise when a company employs managers with claims history. Eventually, it becomes difficult to employ them in key positions if they have a bad track record.
Holding actual people liable sounds like a more effective option. The insurance would just be included into the cost of doing business and make everything more expensive. Insurance makes everything worse.
Holding actual humans liable (with appropriate levels of harshness) would make actual humans more likely to take preventative steps. Holding shareholders somewhat liable (maybe extra taxes on sales of a companies stock) might be useful also.
In EU, NIS2 regulations already hold top management personally liable both financially and in worst case criminally.
Does wonders for how c-level treats compliance work, now if only middle management followed...
Sarbanes-Oxley in the US holds top management personally responsible too, and compliance is taken far more seriously than with other regulations as a result.
If you think there is never a valid use for insurance policies I can’t take you seriously.
Sure there are valid uses for insurance. It is just the incentives are all wrong for the insurance companies.
The incentives are to price risk correctly so that they can price their policies cheap enough to beat the competition while not going out of business from paying more in claims than they receive in premiums.
What do you think their incentives should be?
There is a cap to how much and insurance company can make (health insurance for instance are capped at 20% of premiums). To make more money next year they can sign up more policy holders or make sure costs go up. Companies also often have a large stake in the fix it shops/clinics/hospitals so they recoup much of their cost that way. Market capture, if it cost more to buy insurance than to fix it/absorb the cost without insurance why would you buy insurance. It is useful for the insurance companies to see costs increase.
Sure there can be good arguments for having insurance. Insurance companies are part of the financial sector and will be working to make more money. That is a fine incentive for the insurance industry but for the insurance consumer it is a reason to be skeptical and careful.
Sure, when you want payout. This is not about payout, but about us not wanting it to happen again.
Are we talking hypothetical utopia or something that could actually happen? Insurance probably isn’t the most perfect solution but it’s the most feasible. These exact policies and insurers already exist.
And why the hell would anyone want a job where a mistake results in personal ruin? Sure, there are a lot of shitty companies and people running them, but mistakes also happen when people are trying to do a good job. It’s not possible to completely prevent a data breach even with an unlimited budget.
I think the best solution is to weed out the people who behave irresponsibly and have an environment where we learn from the ones who are responsible and fail anyway.
"A mistake" is a far cry from criminal negligence and we shouldn't conflate them.
>why the hell would anyone want a job where a mistake results in personal ruin?
I guess you think pilots, doctors, air traffic controllers, etc. are all made up?
> And why the hell would anyone want a job where a mistake results in personal ruin
We are talking about the sort of job where you are paid ludicrous amounts of money. The sort of jobs that usually come with massive golden parachutes
People earning more money in a year than most people earn their whole lives should be accepting a much higher burden of risk
Very true. If you don't want to be exposed to such rich, you're free to work elsewhere. No one is forcing you to take on these jobs that immiserate society.
> And why the hell would anyone want a job where a mistake results in personal ruin?
People will do nearly anything if the price is right.
The most reckless will, of course; but most people won't -- they just won't do it.
Corporations evolved the liability structure they have today so that large undertakings, where many people have to work together and where the bad deeds of a small number of those people could sink the undertaking, were something that regular -- people who can't self insure -- could be a part of, as investors, managers, staff, &c, &c.
Limited liability may make accountability too narrow; but blanket personal liability makes it far too broad. It's not a solution for running a large, complex economy in a more accountable way.
And 70 years ago I would agree with you, but now we have a handful of individuals who are the economy with wealth that's rivaling nations. Something has gone awry.
What does that have to with assigning liability to managers as proposed?
It seems like the handful of people you're talking about are totally different people.
Yes, there are some people who thrive on risk and will do things like jump off a mountain in a wing suit just for the thrill of it. That doesn't mean making that sort of personal recklessness legally mandatory for employment is a good idea.
This sort of personal liability OP is proposing would just ensure the security industry is dominated by highly compensated compulsive gamblers because nobody else is insane enough to take the risk. It's an absolutely ridiculous idea.
if you hold people liable, then they will want liability insurance.
what's the point of liability insurance if youll never be held liable?
Could we not keep the same "harsh" plan, and then let others provide and purchase such insurance on their own? Why does the insurance have to be mandated?
Because the company will file bankruptcy and nobody will get anything. Requiring insurance up front at least provides some coverage for liabilities.
It's why you can't legally drive without insurance. It's not for you or your car, nobody cares about that. It's for the other people and their property.
Driving badly or dangerously gets you in prison. Insurance is not there to ensure road safety. Road safety is enforced by punishments.
Nobody is talking about criminal wreckless driving.
We're talking about assurances that you're going to be able to cover damages if you rear-end a sedan and cause $8,000 in repairs. That's why you're required to drive with insurance coverage.
I would draw the comparison to malpractice insurance for doctors. Gun owners should be required to buy something like it. And police departments.
Who receives the payouts of those insurance benefits and how would one go about making a claim?
The company typically receives the payout to cover losses from whatever incident precipitated the claim. This isn’t hypothetical. Companies already do this. For example, a company could get hacked and extorted for ransom. They can file a claim and use the payout to pay the ransom. Or a manager makes a mistake that results in a lawsuit, settlement, defense costs, etc. The company can file a claim against a management liability policy.
What’s new that I’m proposing is to require companies to carry insurance and list accountable people on the policies so that claim history is associated with their decisions. Many companies already have management liability and/or cybersecurity policies, but it’s typically optional and individual decision makers aren’t listed on the policy. The claim history is associated only with the company and never the people who made the decision. That’s why they can just leave and do the same thing somewhere else.
And when the hacked information is used to cause a national-level disaster, the costs of which are greater than the assets of the insurer, and their re-insurance funds, bankrupting them, what then?
Insurance is not a solution for everything.
More critically, just because a company buys insurance, it should not be a get-out-of-jail-free card for the executives and management to feel free to manage data irresponsibly.
It is really simple:
If they can not handle properly the risks of their business, they should be in another business.
In that kind of situation you are just fucked regardless.
Ok. How do you propose they prove they can handle the risks? Who is responsible for determining that and what are their qualifications?
That's the secret: no one can.
Any data stored anywhere can be exfiltrated through either social engineering, or computer hacking.
Make it illegal to have this data, and if they really want it, then you hit them with jail when it leaks, not fines that can be paid by the board in the form of a golden parachute.
Only those that absolutely need data like this should store it. Like, I dunno, the government? Everyone else can rely on zero knowledge proofs or literally anything else than forever storing a scan of someone's entire fucking identity.
Seriously this
We need people to stop internalizing that the government and the rich somehow deserve access to private data just because they want to use it. Seeing a way to make money using enough to make you entitled to it.
Force businesses to add value if they want to exist instead of extraction or rent seeking.
They are, by deciding if they are able to handle having their lives certainly ruined if they screw up. The trick to punishment as deterrence to planned actions is 100% identification and enforcement, so that people will avoid the behavior to avoid the punishment. Anything less and some people will decide the potential payoff of success is worth it.
Reality and certainty of consequences, not evasion and insuring of liability
I specified it in the last sentence: >>If they can not handle properly the risks of their business, they should be in another business.
The same way it is handled in any other business or trade with risk.
Make sure the risks are also PERSONALLY CONSEQUENTIAL TO THEM.
If they fail to handle the business with state-of-the-art advanced knowledge, intelligence, diligence, and resources, then they will face serious personal consequences. If they do not want to take that risk, they are free to go work in any other business.
Some people are fine taking the risks of subsea welding or windmill maintenance. Others are not, and are free to pursue other work. The risks for fuking-up there include sudden death and life-changing injury.
It should be the same for people risking the livelihoods of every person who's data they handle — if they fuk-up badly enough, their risk should be financial bankruptcy and prison.
Instead, white-collar work is typically organized so those who fckup get a promotion or just find a new higher-paying job, while the people they screwed over are left to deal with the consequences.
This is data that will be relevant for every single victim for decades to come and they will pay for this regularly, and it cannot be undone.
What amount per person is acceptable for a thing that simply should never happen?
I don't think "this will ruin my and my bosses life"-levels are over the top at all. Don't wanna risk it, then don't store the data. Usually for most purposes it would be e ough to store that yes, someone has a legit drivers license, which types of vehicles it is for and how long it is valid (if there is a limit).
We don't get to this kind of data reduction if people don't see data as the liability it sometimes is for their customers.
There is no legal basis for this for taking the salaries of everyone who worked at the company in any level of management at any time.
No large undertaking could ever function with such broad exposure to liability, anyways.
That's right: no legal basis exists now. The proposal is to create such legal basis.
And if "No large undertaking could ever function with such broad exposure to liability" - that would be great, i think we would prefer that such firms doesn't exists.
"such firms" being any and all IT companies?
They would still exist, just not in any country insane enough to pass a ridiculous law like this.
> that would be great, i think we would prefer that such firms doesn't exists
They stop existing within your jurisdiction. Also, the idea that the public would go along with any of this for this issue is silly. Let's start with crimes that actually cost lives.
> Let's start with crimes that actually cost lives.
https://spectrumlocalnews.com/tx/south-texas-el-paso/news/20...
"According to the Identity Theft Resource Center’s 2023 Consumer Impact Report, 16% of identity theft victims are experiencing suicidal thoughts."
Then such businesses should not exist. What right do they have to gamble with the wealth of 150 million people unrelated to their enterprise?
This can't happen to government agencies? Well then let's not have governments either!
All the better, I've long suspected that these companies are collecting this data and selling some portion of it. Having this category of business entirely disappear sounds like a solid win to me.
I see no problem with a rule that effectively says no company can exist if it holds such detailed records on millions of people.
Something much more targeted is appropriate there. Maybe we need a regulatory framework where people own their own data. Make it impractical, expensive and burdensome to hold personal data you don't absolutely need.
That has nothing to do with changing the whole approach to -- really undermining the whole idea of -- corporations. Limited liability is the only way they can work. It's a cornerstone of every developed economy.
Corporate officers can already be held individually liable for some things. This would just add another one, it wouldn’t be undermining the whole idea of corporations. If individuals can be held personally liable for their company’s failure to pay payroll taxes and corporations still manage to exist and do business, then I don’t see why this would be so different.
What situation do you have in mind when you say "...individuals can be held personally liable for their company’s failure to pay payroll taxes..."?
I’m not quite sure how to answer that. The situation I have in mind is the one described in the bit you quoted. A company doesn’t pay legally required payroll taxes, then depending on circumstances, corporate officers may be personally liable for them. See: https://www.irs.gov/irm/part5/irm_05-017-007
IRM 5.17.7 (https://www.irs.gov/irm/part5/irm_05-017-007), is about corporate officers who have a duty "...to account for, collect, and pay over..." taxes and failed to perform that duty.
I don't think this is at all similar to jsrozner's solution, which is to assign liability to "...every person who has ever worked for IDScan at any level of management...".
The IRM is describing officers with culpability as individuals whereas jsrozner is really proposing to do without any individuate consideration of wrongdoing at all.
Restitution is the legal basis, let's not act like the rich don't force the poor to pay for their civil violations. What it sounds like is the rich don't like it when the law is applied fairly to them too.
It seems like there is something specific to this that you are missing.
Holding all managers personally accountable for actions of a corporation runs up against the legal structure of a corporation -- a legal structure that is definitely not one of joint and several liability. That is what I mean when I say there is no legal basis for it. The whole point of a corporation is that the corporation is liable (which is a great convenience in many respects).
Restitution is not about who is liable but about making a wrong right. It's a different layer.
Restitution is an equitable remedy, not a legal basis.
Or maybe something bigger should change
like why your driver license or even id should enable someone to do damage to your life?
especially that it isnt difficult to lose it and even needs to be shared with someone (e.g hotel)?
Perhaps you’re right but how about starting with anything at all meaningful against the company itself?
They end up pay some class action lawyers $8 million dollars and we get a letter offering FREE CREDIT MONITORING!!1!
Fines exceeding 100% of lifetime compensation might actually do something. As it stands, clawbacks are ineffective — for example, Carrie Tolstedt of the Wells Fargo scandal wound up money ahead to the tune of tens of millions of dollars:
https://en.wikipedia.org/wiki/Carrie_Tolstedt
> In response to the report, Wells Fargo retroactively fired Tolstedt for cause and revoked $47.3 million that they had previously paid her. This brought the total amount of money she had given up to $67 million, or about 54% of her $125 million pay package she initially received when she retired.
This is so unrealistic but I do agree personal liability should come into play more for people who knowingly act inappropriately.
It's already a rh>ng for critical infrastructure companies in EU.
Unfortunately "knowingly act inappropriately" is going to be tough to prove. I think it's better to pin the responsibility onto the top executives unless they can prove that it was a specific bad actor despite systems put in place to prevent that. Otherwise, it's too easy for execs to ignore privacy and security concerns just because they are not familiar with that side of things.
We should also make it much easier for company employees to whistle-blow or even initiate stringent audits of security and privacy.
It's perfectly reasonable, and if something perfectly reasonable is "unrealistic", then the system is corrupt.
Bankrupting everyone who does business by making them repay 300% of earnings is unreasonable.
The liability shield is too strong though so I do agree it’s causing problems.
The socialized losses vastly exceed 300% of earnings - they're analogous to a company mishandling toxic waste and ruining everyone around them. The way they are running their business is catastrophically irresponsible, and if they can't afford the consequences, they shouldn't have gone into this business.
Don't forget jailing the idiot politicians who okayed handing over all those driver's licenses to a private company.
I've got bad news for you jsrozner, John down in accounting at <your employer> did something very unethical last week. So you, jsrozner, a first level manager in customer support who has never even met John, are going to jail for a decade and all lifetime compensation will be clawed back.
No, this is a NOW problem, not a future one and it will take months if not years to fully understand the impact. We need a NOW solution not prevention. Training AI on all the images and data here will facilitate a class of identity theft we may not have ever seen. This cannot just be abut prevention.
Including investors is a bit much unless they encouraged or mandated some decisons that enabled this.
Investors benefit from company gains despite not having encouraged or mandated some decisions that enabled the gains. So it makes sense that they also get exposure to the downside.
They already get downsides if company gets fines or even goes to bankruptcy. You never know whether they invested based on information that was not true at all. Which is unfortunately too common.
It sounds like they need additional exposure then as they aren't assessing the real risks and seem to have completely ignored them. Why should society care that some group of investors didn't do their homework? Is that the excuse we use to avoid prison sentences now?
There are many, many cases where investors are misled by companies -- this falls under the (very broad) heading of securities fraud and it's easy to find documented cases of it. It's not a question of doing their homework.
There is literally no way to have the broad base of investment in markets by members of the public that we see today if investors incur personal liability. It was and remains one of cornerstones of any commercial society.
They said VC, not all investors.
Let's say the investor part doesn't apply to public companies, to make it simple.
That still seems hard to make workable but I guess it doesn't seem impossible in the same way.
They gain but under a structure where they literally don't control the company at all -- that's kind of the point.
jsrozner for president. Again... just imagine the cost of say replacing the SSN and each and every one of the licence drivers in the US... JUST IMAGINE THAT COST PAID FROM THE TAXES YOU PAID, and again by you because it's not free... so it's leaked all over again in 1 month because there is no way "to incentivize these guys to jail" fast enough. It's done and works that way because the deterrents are 1% of the income of the company.
It's cleaner to hold some of a corp's money in escrow if they're handling IDs, to ensure they can't avoid fines via bankruptcy.
Fines on the scale that it might be reasonable to reserve escrow funds for are just "cost of doing business" fines.
Companies typically have insurance policies to cover this kind of stuff.
People need to stop believing insane, delusional things like the existence of a human being with a certain name, address, phone number, birthday, SSN being secret or private information.
Downstream of that, people need to stop accepting knowledge of the basic public metadata fields or possession of images containing them as evidence of identity verification. Do actual public key cryptography on the internet or check biometrics and the document’s physical security measures in person.
Or, we could introduce a software building code, the way we have codes for every other kind of safety-impacting product. But apparently software is never unsafe, we never need to protect people from software systems, and definitely shouldn't pass a law requiring those systems be protected adequately, with legal consequences for not doing so.
Even though software has been around for a while now, it does still seem to be evolving rapidly enough that a fixed code is a bad idea. Remember password change requirements that were terrible, but stuck around for 20 years before being removed from the relevant voluntary code (I think something from NIST)?
You're describing a compliance success story.
NIST creates the standards that businesses must follow when doing business with the Federal Government. Without those standards, the government's operations would be even more unreliable and haphazard than they are today.
A long time ago they mandated a single password policy, because having thousands of agencies all with different password policies was crazy. At the time, they (and the industry) thought it was a good policy. Some people suspected otherwise, but there was no proof to show that a change was necessary. So academic research was undertaken to find whether the policy was helping. The research showed that it was more harmful than helpful.
Academia proposed a solution, NIST considered it, and then adopted it, in 2017. The language they used in 2017 was "flexible", so nobody really had to change. Finally in 2025 they made the language mandatory. Now the affected companies will be forced to abandon their crappy password policies, specifically because they aren't allowed to keep them anymore, if they want those lucrative contracts.
This should not just apply to the Federal Government. The same reasons FedGov needs these standards applies to every single one of us. The tech lobby has successfully fought this for years, and politicians are scared of introducing something that might negatively impact public citizens (and thus risk the politician's job). But they can't deny that FedGov needs these standards.
This is a pretty normal process. The electrical code, building code, fire code, etc, all take time to change. But the changes do happen, and we all reap the benefits. With no code at all, we would be experiencing a lot more death, injury, financial loss, and inconvenience.
And btw, there is a lot of technology that has not evolved much in 40 years. We don't need to make everything absolutely perfect, and every aspect 100% set in stone, in order to have a code. Every other code is updated regularly. Software code can change too. (Or are software people too incompetent to figure it out? I might agree with that...)
It's a failure story of regulation because the regulation was bad, and took forever to get changed.
I don't mind if government software has to use Dual_EC_DRBG - let the government hack itself. I do care if you get prison time for using a secure random number generator.
If you add in personal liability for mistakes, nobody competent will ever bother working in the industry again. It's not worth the personal risk. You'll get stuck with bottom of the barrel staff who don't have much to lose and get a steady paycheck for a few years.
I believe that many "professionals" have personal liability and carry insurance.
Lawyers, doctors, and engineers to name a few.
The liability the OP describes is clownish and nobody would ever insure against it.
That still prevents it from happening again, no? Still seems like a success.
No, it guarantees it will happen because only terrible people will work on the systems.
You do realize the limited liability corporation was a key innovation that unlocked the Industrial Revolution, right?
Companies definitely respond to fines or liability. They just need to be big enough.
For example, I recently heard an interview from an environmentalist who expected to be outraged touring a Chevron drilling location but was surprised by how much precaution is taken these days. Basically, liability for oil spills is massive. We could just make data leak liability massive too.
That works for Chevron because they have enormous assets to lose.
In the ID company case, there simply aren't enormous assets available, despite enormous damage being possible. As such, we really need to re-think just how much we limit liability.
Perhaps it's time to stop allowing degenerate gamblers to freeroll their risks... perhaps it's time to start zeroing out investors, so that they have to start behaving responsibly.
This.
100%
Great way to incentivize everyone to do nothing. Most middle managers don’t know shit.
> personal liability for the executives and managers at the company
How cute, you think the engineers who failed to properly develop and maintain a system that can securely store sensitive information flawlessly won't (or shouldn't) be held accountable.
Every time this topic comes up it makes me wonder how many people on here who go "wow how in this day and age is it possible to have a data breach???" aren't just extraordinarily lucky that no one is really trying to attack the service they created or are fortunate enough to work in the few places that can legitimately say they're nigh-impenetrable.
Does IDScan need to store the IDs after they've verified them?
If they deleted the IDs within a week of getting them surely the leak would be much smaller.
Making holding data like this a liability that has to be insured, etc... is part of a good solution IMO.
KYC = kill your customer
It's time for us to stop pretending that YC checks do anything except provide an illusion of security while putting people's living in danger.
AI makes it trivial to generate fake documents, so most KYC checks can't actually be trusted to verify your identity. As an example of how ridiculous things have gotten, Anthropic launched their verification program for granting access to their Mythos models. North Korea are experts at bypassing KYC checks and were granted early access while the rest of us were locked out.
These leaks are constant and largely unavoidable. Even the largest, most trusted companies in the world get regularly hacked. My passport was leaked and I've received multiple blackmail attempts from people demanding I pay a ransom. There have been multiple kidnappings that have been related to home addresses and private information being leaked.
The situation is really bad, and there are no easy solutions. The correct answer is probably a new government ID system based on public key encryption with some sort of multi-sig between the individual, the government, and your parents (until you're 18). This won't be easy to roll out, but our current system is broken beyond repair. Unfortunately, things probably need to get way worse before anyone cares enough to fix it.
> Even the largest, most trusted companies in the world get regularly hacked
Yes, they do. Fundamentally this is because they don't spend enough money on security (like basically everybody else).
Some form of personal liability for executives is one (relatively simple) way to ensure that this becomes a priority, like SOX did for financial reporting.
There are other ways, but I do like the personal liability approach as its targeted, and has been used successfully in the past.
So if I steal someone's private key I can be them and nobody can refute that I'm them? And the government retains a record of everything you ever do? How's that any better than the present state of things?
> The correct answer is probably a new government ID system based on public key encryptio
Check out Estonia
The interesting question is how to verify who someone is before issuing them a digital ID. Estonia verifies people using their Estonian ID cards, their mobile devices, or biometric data if they have it recorded.
The system is only as strong as its weakest link. ID cards can be faked and mobile devices can be stolen. Biometrics can't be easily faked, but they're horrible to have leaked because you can't change your fingerprints or eyeballs if compromised.
Near the beginning of my career, I talked to a greybeard who harrumphed at me discussing something-or-other and said "computer security is an oxymoron". I thought he was being too pessimistic, nowadays I realize he was right.
If he's grey enough, he might have predated effective cryptography.
it's silly to think about computer security as binary secure/insecure.
If it’s not secure, by definition it’s insecure.
there is no perfectly secure system and defining everything as insecure is useless.
outside of english class "secure" is relative and context-dependent, not binary.
That's too pessimistic. But it is a spectrum. You can't guarantee 100% success against 100% of potential attackers, but it still matters how easy it is to get into something. There's a pretty big difference between a Windows 95 machine hooked directly to the internet and something like a fully up-to-date iPhone. The iPhone is still hackable, but in practice it's so difficult that you're unlikely to be targeted unless you get the attention of a national government.
It also requires actually caring about security and putting effort into it. These data breaches are usually systems where little attention was paid to security in the first place, and e.g. getting ahold of one user's password is enough to lose the game. Getting companies to care about security is really hard, but it does happen.
Real computer security IS possible but takes a lot of effort by very skilled and dedicated people. You don't hear about bank mainframes getting hacked often.
Skilled and dedicated people and an organization dedicated to maintaining a consistent level of security. Maintaining both of these long term seems to be the challenge for many companies.
> You don't hear about bank mainframes getting hacked often.
Who do you think employs the top-level criminals?
Sure, but not in the IT service.
It makes systems harder to work with and new features slower to deploy and it requires you to make sure you stay on top of CVEs.
That's overhead that businesses really hate paying as it's diverts software devs away from making new features.
Software companies sure hate paying for the realities of developing and maintaining software. Sigh.
Human security. Computers are fine, they usually do exactly as they’re programmed.
We don't care about the computers, humans are what society is for
Yes, of course.
My point was that computers are as secure as human(s) who programmed them were careful and competent. Computer security is ultimately human knowledge and reasoning competence (plus time/money tradeoffs, if made willingly)
getting the idea lately that society hates humans
Caring for humans hurts profits
I'm reminded of the OPM breach back in 2015 [0]. Practically everyone that even applied for a security clearance was compromised. In addition, millions of sets of fingerprints were recovered by the entity that carried out the hack.
[0] https://en.wikipedia.org/wiki/2015_Office_of_Personnel_Manag...
Will anything be different _this time around_?
https://en.wikipedia.org/wiki/2015_Office_of_Personnel_Manag... was a National Security Disaster and I'm not sure we saw useful concrete changes.
Equifax's stock price went up when they were hacked.
Joking right :)
Elon fucking Musk has literally every single piece of personal information of every person in the country. It’s so far past too late for any of this to matter.
I’m not sure how we start over but this data plus LLMs is gonna make it a full time job to keep your parents from sending every penny to a scammer.
Is there any way to check if your ID was compromised without going on some onion site?
I don't know if it even matters. I always assumed every bit of my information was available somewhere. Just curious.
I think IDScan should set something up so we can check if our data was compromised, at the least.
What I would love to know is who is selling my info. I get texts from all kinds of politicians but I didn't know who sold them my number. Seems like selling someone's property without their approval should be illegal. It'd be great if I could request who sold them my data, then go to that entity tell them to stop selling (rinse and repeat)
At least here in California (maybe the whole US) I think there is a law requiring the government to give our phone numbers to politicians to spam us.
Seems crazy until you realize politicians write the laws
> What I would love to know is who is selling my info.
Car dealerships. Heck, even the DMV. Sign up for Credit Karma? Enjoy credit card offers arriving to your house. It seems everyone is "in" on selling/sharing our data. If you ever read the terms of services, you'll usually see a "third party partners", or something like that, which mentions how they "share" your data.
Opt out should be the default, but it isn't.
> It'd be great if I could request who sold them my data, then go to that entity tell them to stop selling (rinse and repeat)
There are a number of companies (e.g. Delete Me) that offer that service. They wouldn't have caught the subject of this post since it was a breach.
The problem here arose from ID verification where you need to show your ID to an entity that then has the opportunity to store it.
Most of these companies are themselves data harvesting scams. You have to give them all your data so they know what to delete. Then they sell that data.
This is true. I think Brian Krebs reported on a scam involving this. Some of those data deletion companies actually own the data companies...
Its unfortunate that the security requirements are expected from the for-profit businesses when the cost of paying penalties for breach of security is way lower than actually implementing the security.
Ironically in case of breach they just sell you another of their product where you put your personal information again
The CRAs compete for breach business, because it's absolutely a profitable enterprise for them:
How many people actually sign up for your "free credit monitoring for a year" following a breach?
When you do, you typically do so by signing up for the highest tier (sometimes $30 or even $50 a month) product with a redemption code for one year free. You have to enter a credit card to do so, and to no-one's surprise, if you don't cancel in time, it automatically converts to a paid subscription "for your convenience".
There are many consumer protection farces in the US, but right up there has to be the notion that "identity theft" is the consumer's responsibility/obligation to prevent or resolve, not the entity that actually had the data stolen. You're considered liable until you prove innocence, even though you did nothing wrong.
This very nearly burned me when buying my home - having been an AT&T customer in the PNW for nearly two decades, "I" apparently decided to hit up a Walmart on the outskirts of El Paso, sign up for a Verizon service, run up two months of international calls and bail out.
Despite a police report, my utility statements, AT&T bills, etc. (all of which were, to be blunt, none of VZWs business), VZW stood by it initially, "On review of your documentation, we remain satisfied that this debt belongs to you based on the documents used to open your account".
I asked to see them, since they were, in VZW's own words, "mine". "We can't, for customer privacy reasons." Oh, so "mine when the bill needs paid, may not be mine for privacy purposes".
Was ran through the same gauntlet by a medical provider billing me for services. Insurance wouldn't pay them due to "insufficient documentation". Wouldn't disclose what documentation they had received or what documentation they needed. Just that is was inadequate. Service provider wouldn't tell me what they had sent.
Somehow a few hours before our court hearing they by some miracle decided to settle the debt with no fee to me.
> the notion that "identity theft" is the consumer's responsibility/obligation to prevent or resolve, not the entity that actually had the data stolen.
You may enjoy/find-useful this Mitchell & Webb radio-skit [0] of a conversation between a banker and a visiting customer.
[0] https://www.youtube.com/watch?v=CS9ptA3Ya9E
American national security apparatus do not care about the actual Americans. They are too worried about foreign entanglements, and protecting a specific foreign country than their own country.
I'd rather tackle this problem from a different angle. If a bank gives a fraudulent loan to someone in your name, its YOUR problem and not the bank's problem. Why don't we make it the bank's problem? They gave the fraudulent loan. How is it not their problem to fix?
If we fix that, then having your ID stolen is a much, much smaller problem.
It's probably related to "the optimal level of fraud in a financial system is not zero" and reducing false positives would make way harder for everyone to get loans, which is bad for both banks and consumers.
https://www.youtube.com/watch?v=CS9ptA3Ya9E
I really want these people handling my healthcare and other details about my life.
Private healthcare is much worse, seemingly they have an open access policy. New breaches occur in the order of millions per week. Not remotely newsworthy anymore. (last time this was mainstream worthy was 200M leaked records in 2024). Last week https://www.securityweek.com/4-1-million-impacted-by-adapthe... Week before that https://www.yahoo.com/news/us/articles/more-9-5-million-pati... 2 weeks before that: https://www.msn.com/en-us/health/general/carecloud-confirms-...
And it will remain this was as long as the consequences of not protecting our data remain trivial.
if only we prosecuted corporations as people instead of just giving them the civil liberties of one
In my experience, any industry following a security standard halts all effort at security once they're compliant with the standard. HIPAA sets a minimum but seems to also guarantee you will get exactly that minimum and nothing better.
The only thing HIPAA guarantees is that when your data is handed out, there was a policy around it.
Not true, it makes investigating medical fraud almost impossible.
Which people? This leak was caused completely by private businesses.
I'm confused about the read on this too. It reads like a "I don't want the government involved in my healthcare" type of statement, but it's posted in the discussion section of an article about private companies mishandling data.
You want an ID verification company handling healthcare? Even if you're a staunch believer in free enterprise this seems like a capability mismatch.
Damn. I just received a notice my PII (including SSN) was leaked in the DentaQuest security breach (May 2026). Something between 2.6M - 15M records.
Personally, data security is the AI Doom I’m concerned about, not being turned into paperclips.
https://haveibeenpwned.com/Breach/DentaQuest
Wow, how could this have happened right before the election? Surely this will not be used as a pretext for anything.
ProTip: US Passport Cards are official identification documents which don't have your home address listed on them.
Also: many US states allow you to use a PO Box on your license (e.g: Calif., Tenn., Texas)
Glad to see someone talking about this
I'm glad to see this keep popping up. It gets pushed down, very quickly, when it does.
I suspect the reason for that (nothing other than a "gut feeling" that I get, seeing the story pushed off the front page so quickly, every time), is that the breach was through a backdoor that was deliberately coded into the system, for TLA use, and what happened, is exactly what people keep warning about; it got breached, and is now a "front door," and The Powers That Be don't want that examined too closely.
Does anyone know what "disabling advertising identifiers" actually means?
We need a corporate death penalty for these kinds of breaches.
The breach is bad no doubt-- but this information was already readily available to bad actors e.g. via Lexis Nexis. Practically all states sell DL and registration information to information brokers, and the remaining ones require you to obtain auto insurance, and the insurers all sell the information.
Many people pretend this isn't happening because of the "The Drivers Privacy Protection Act" but the DPPA is paper thin protection at best as it has a long list of permitted uses which anyone can just lie about (and are you worried about threats from parties so honest they're unable to lie?). Not that they usually have to lie given that the permitted uses include "For use by licensed private investigation agencies" and "For the bulk distribution of surveys, marketing materials, or solicitations"... In practice this just means accessing the information costs a little money and requires someone check a "this is for a permitted purpose" checkbox. The biggest impact is that it causes abusers of the information to be circumspect about their sources, which helps maintain the data-harvesting status quo.
(Guess what: the same databases also have ALPR gathered pictures of your car at whatever locations its been in public view... stores, your home, your mistresses home... Makes flock (YC S17) look pretty mild by comparison. The fundamental sin is requiring ID without also making it a crime for anyone but the owner and issuer to posses someone elses ID information.)
In some sense the IDScan breach may (ultimately) improve our privacy and security because it will break people out of the FALSE belief that this information is private, or that it can be protected by anything short of restricting its collection in the first place.
"but this information was already readily available to bad actors e.g. via Lexis Nexis."
My ex had access to Lexis Nexis and I was always shocked how much information about people they have.
Ia also wonder just how hard it is to figure out the info someone’s drivers license from scratch. My license has:
Are any of these very difficult to find?I think if I was targeting you specifically, probably not, most of these details would be apparent upon seeing you. But, would you be comfortable if I had these details on a card with my photograph? Highlights a risk around ease of credit applications etc.
Right on! It's always frustrating reading articles framed in terms of "security breaches" and "dark web", invariably doing hand waving at unspecified harm, when the real threat actor for pretty much everybody is the "above board" surveillance industry. Random people who buy this info outside the law can't really hurt me - it's not like I'm a witch and my DL# is my "true (system-given) name" and I disappear when they say it or something. Rather the parties who can hurt me are the ones who pretend knowledge of this semi-public information is an authentication system, and then hassle me with legal nastygrams when they get defrauded. Or who keep comprehensive dossiers on my behavior to unaccountably sort me into corporate-defined boxes so they can better extract my wealth and otherwise form anti-competitive arrangements against me. These actual attackers operate mostly according to the (very broken) law, and they are what needs fixing. Not just scaremongering when some bogeyman "wrong people" get a small taste of the exact same information.
Is there anything comparable going on to the data of Chinese citizens? Or Chinese public servants?
There were times when the words “national security” made rules and laws magically evaporate. Now that total surveillance is already here, companies and agencies can have it for close to free, and nobody gives a rat's ass for rules and laws anyway, national security is no longer needed.
Hundreds of millions of American's names, addresses, social security numbers, etc were in the NPD leak which has been publicly downloadable. The idea that any of this information should be considered private, only knowable by the person themself is wrong.
Slackers are always behind this shit
When this first landed I asked what the fix could even be. Everyone needs a new ID at a minimum. But then I got to thinking: 1) is that the point? Conspiratorial thinking I know but “hey all Our ids got hacked I guess we need a national id”. And related 2) the current id system from a security standpoint was a band aid fix for outdated world to be shoehorned into a modern one. IDscan was never cryptographic proof you were who you said you were. Maybe better than “enter your name and SSN” but bottom line, at least in US there is no cryptographically secure identity system that proves you are the citizen you say. And that fact bleeds into all sorts of patchwork solutions, fraud, etc. Moreover there are serious philosophical hurdles to getting to one. I’m not even positive I want one. But unless there is some zero-trust way to do this, I’m not sure what the fix would be.
And then, in real life, one discovers that institutions route around in creative ways for all sorts of different reasons ( recently had to 2fa a transaction at a god damn teller window; you just took my DL ).
Isn't the DL (which has a picture) and your face the two factors? Isn't that the whole point of having a picture on a DL?
Yes, but it is rather pointless to argue with teller who can't even begin to understand policy dictating it, much less, apparently, make exceptions. Machine told me to do it.
No, the teller is not sufficiently qualified to be liable enough to match the picture on the ID to the person in front.
The 2nd factor is the phone number on file, which offloads liability for errors in that mechanism to the phone company.
The goal is to reduce the amount of decisions the teller makes, so as to reduce the amount of errors they can make, which also reduces the amount of training they need, all of which reduces costs.
It’s really interesting how the lack of US federal government stepping in to provide an official electronic identity verification API has resulted in the mobile phone networks becoming the de facto arbiters of identity. Even for government services.
I don’t even think I could trust having my phone number on someone else’s mobile phone plan, as I would want to ensure I have as much control over it as possible.
> IDscan was never cryptographic proof you were who you said you were. Maybe better than “enter your name and SSN”
With the benefit of hindsight, we'd have all been better off if SSNs had been so obviously flagrantly public that nobody would ever consider them a trust-factor.
To be fair many SS cards were printed stating right on them they aren't for ID usage.
Right, I don't blame the SS administration, they knew what people shouldn't do and warned everyone about it... the problem was private companies were desperate for security-theater and were never punished as they built an entire grand opera-house of insecurity.
Yep. Social Security numbers are not guaranteed to be unique, and for a very long time, were pretty easy to figure out if you knew roughly when a person was born and where.
"I know! We'll use this number that its issuing agency says is most definitely not to be used for identification purposes for identification purposes!" is real PHB thinking.
But they were! My college student ID from 1980 has my SS number right on it. I have here an employee badge from the Walt Disney Company from 2000 and my SS number is in a bar code right on the bottom. Even in 2000, it would be trivial to take a photo of someone wearing the ID badge and decode the 1D bar code on it.
Right, but somehow a bunch of companies still made them into a "prove who you are" factor, and (if we assume incompetence instead of malice) that means a bunch of decision makers still considered the a trust factor.
In some states, until the early 1990s, SSNs were also used as drivers license numbers.
Passports seem a lot better. You scan it with NFC, and the chip inside proves authenticity via asymmetric crypto.