A gram of caution is worth a ton of remedy

While quick and efficient refunds are important (and usually available to consumers), industry has taken the initiative in this field of self-regulation - implementing systems that alert consumers of suspicious transactions and automatically block payments. Industry has been able to develop its own expertise in security and knowledge of the profile of online fraudsters. The same technologies that facilitate the fraud can also be used to predict criminal activity and speed up resolution of consumer complaints.

Of course industry does not always get it right. There is red tape in any system and there are inevitable consumer complaints and here the role of government, such as the ACCC and regulatory bodies such as the banking ombudsman are highlighted. Policymakers have a strong role in key areas of identity risk and new problems, such as citizens with a language other than English; or consumers of adult goods and services who are not protected by Paypal and face substantial embarrassment in seeking remedies for fraud.

As with all forms of commerce, the government has an important role in identifying and protecting those most vulnerable to exploitation. The globalised nature of the Internet means that criminal sanctions may not be effective in catching online fraudsters, nor in deterring others, but at the very least a government can pursue criminals operating from their own territory.

Government therefore has an important role in protecting and supporting the self-governance strategies of citizens and industry. Too tight controls inhibit e-commerce and too alarmist warnings would also put the brakes on the online economy.

A gram of caution is worth a ton of remedy, but if remedy is necessary then it is vital that self-governance activities are supported by government. Self-regulation is an important concept in modern governance and identity theft is no exception. There is a mutual three-part relationship between the citizen or consumer, government regulators and industry to provide a safe e-commerce environment for consumers who are wise enough to stay alert but not too scared to venture online lest their identity be snatched away by a thief.