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Comment by jameshart | Hacker News Reader

What Alice is the victim of is slander, not fraud or identity theft. The bank lent some money to someone who claimed to be Alice (though the bank only relied on the fact that that person knew Alice's SSN as proof of that fact). Then when the bank didn't get paid back, they told a bunch of credit check bureaus that Alice was a credit risk. This was a lie about Alice, which has a material impact on Alice's reputation. The credit agencies then go ahead and repeat that slander.

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This is a great description of what is going on with "identity theft". I don't usually like changing the name of something to try to push an agenda, but calling "identity theft" "bank slander" would be good idea.

So presumably a class action law suit against the reporters for slander? Might depend on specifics of the law... Maybe it's time for a better credit reporting agency startup.

Especially if a very large class action law suit was started from this.

Calling all identity thief peeps....

You mean slander by banks, not slander of banks. The term you propose is ambiguous.

Defamation laws differ by state, but in NY for example, I believe libel (slander refers to oral defamation) requires that the perpetrator knew, or should have known, that the statements were false.

The question would then become whether the bank's identity verification procedures satisfy that burden. I think it would be a difficult endeavor, but it would be good to see it tested.

Yes, libel is correct.

They absolutely should have known it was wrong -- their business is lending money to people! If their procedure is insufficient, they should have fixed this.

I would love to see the banks sued for libel, a massive class action suit. There are real monetery damages it one could put a number on, and the difference between a bad and a good 30 year mortgage will be a big number.

Well, yes, Alice is the victim of slander, and the bank is a victim of fraud. But the important point is that neither of those imply that Alice is responsible for anything.

I haven't dug too deeply into this, but a defamation claim under state law would probably be pre-empted by the Fair Credit Reporting Act. You mostly can't sue them unless you can prove they defamed you with malice or with willful intent.

https://www.law.cornell.edu/uscode/text/15/1681h

In this case, maybe you could have a shot by arguing that since the bureaus know that like half the population's information was stolen, they are acting with reckless disregard for whether their statements are true if they don't now do additional investigation to confirm the identity of the subject of their statements in order to mitigate the effects of the breach.

Hmm, I guess you could call it slander if the person and the dossier were perfectly interchangeable. But all the institutions know is that someone has been failing to pay back loans that were issued based on the information in a dossier. After a series of fraudulent loans to "Alice Doe, SSN 123-45-6789" (the file, not the person), when some random shows up at Yet Another State Bank and tries to take out a loan under the same credentials, the credit reporter is right to warn of the risk. They don't know if Human Alice is a risk, but Paper Alice definitely is.

That distinction holds up only if real Alice isn't inconvenienced in any way.

She would be inconvenienced, but that doesn't mean she was slandered.

If someone steals Alice's car and commits a hit-and-run, she will be inconvenienced when the cops show up at her door, but the person who reports her plates won't be committing slander.

But if a newspaper reported that Alice was a murderer because her stolen car was involved in a hit and run, that would be libelous.

If they said they had received word that the car was registered to Alice, that wouldn't be libelous. If they said she was the driver, that would be libelous. If she was charged with murder and they said she was an alleged murderer, that wouldn't be libelous.

Wow, I learned a ton from this comment. I would have never come up with this on my own.

Technically since the defamation is written rather than spoken, it is libel, not slander. :-)

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