Identity Theft: Improbable Damages Claims

/ / Expert Testimony, Publications

Recently, economists at the Center for Forensic Economic Studies have been asked to analyze improbable damages claims made in matters involving identity theft (misappropriation of credit-card numbers or other personal financial information).

These claims are for damage to “inherent credit reputation.” Exactly what “inherent credit reputation” is, how it is damaged, and how it is measured is left unexplained by the claimants in their damages reports. The loss, while nebulous and ill-defined, is usually put at multiples of plaintiffs’ annual earnings (usually five years), adding significant amounts to claims.

In fact, “inherent credit reputation” damages claims have been made in matters where there is demonstrably no out-of-pocket loss and where any damage to the victim’s credit rating is nonexistent.

The main elements of damages in most instances of identity theft are out-of-pocket expenses suffered by the theft victim, damages for the amount of time it might take the victim to rectify erroneous financial records, and damages arising from erroneous credit reports. These damages arise directly from the theft and can be quantified in a straightforward manner. Ill-defined claims for “inherent loss” are clearly vulnerable to a Daubert challenge — there is no conceivable basis for such testimony, and a motion in limine should be considered by any defendant facing such claims.

Economists at the Center for Forensic Studies have significant experience analyzing actual loss in identity-theft matters. For more info0rmationj or to discuss a matter requiring damages analysis, contact the Center atcfes@cfes.com or (800) 966-6099

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