The Risk Factor

A few more shoes hit the floor in the UK id scandal.

According to the London Telegraph, the cost to secure those missing CDs containing the personal details of 25 million UK citizens was a whopping £5,000. HM Revenue and Custom senior officials didn't want to spend that amount of money to filter out sensitive personal data because to do so would "overburden the business by asking them to run additional data scans/filters that may incur a cost to the department". The current estimated cost of mitigating the risk of losing the data may reach £200 million, even if no fraud is committed. Nove cost/benefit ration, don't you think.

The Chancellor of the Exchequer Alistair Darling claimed that senior HMRC managers were not informed for three weeks that the 2 CDs went missing. Yet, in fact, HMRC was told within 6 days of the CDs being sent that they were missing by their intended recipient, the National Audit Office (NAO). The children's chant of liar, liar, pants on fire seems most apropos here.

The BBC is now reporting that instead of just four CDs, there now appear to be six HMRC CDs containing UK citizen private information that are missing. No one should be surprised that this number steadily increases over the coming week.

In the same BBC report, there is now a growing row between the UK government and the banks over who will pay for any fraud that might be committed. The UK government says that the banks are responsible in making their customers whole, and the banks naturally are saying, wait a minute, the government should be the ones paying since it caused the mess.

Anyone want to bet that the government will win in shifting its moral if not legal financial obligation to the banks, and the banks in turn will soon jack up their fees as an excuse to pay for "future fraud payouts," as well as play hardball with any customer who claims id theft?