Privacy Is Under Siege at Work, at Home, and Online
As the Mitchells learned, it's increasingly difficult to keep a tight rein on your financial privacy. There's so much to worry about: Identity thieves, hackers, and marketers all seem to have insatiable appetites for your financial dossier. "Your personal information is worth money," says Evan Hendricks, editor of Privacy Times, a newsletter in Washington, D.C. With your data exposed to so many people these days, you're susceptible to fraud, questionable marketing spiels, bogus bills, and the potential destruction of your hard-earned credit history. Wielding control of your financial privacy means keeping tabs on who is plucking your data and why.
The Internet has spawned a new modus operandi for miscreants. Earlier this month, someone cracked Western Union's Web site and retrieved the credit and debit card numbers of more than 15,000 customers. Cyberhooligans can download programs from the Web that generate valid card numbers using the same algorithms used by banks. What's more, organized crime rings have planted employees in restaurants and gas stations to nab card data by "skimming" them off a genuine card with a special device that is easily concealed in a pocket.
It's not just crooks who dabble in financial intelligence. Minnesota Attorney General Mike Hatch last year sued U.S. Bank for fraud and deception for selling customer data, including credit card numbers and account balances, to a direct marketer--after saying it wouldn't. The telemarketer, says Hatch, used misleading pitches to sell unsuspecting customers discount memberships in health and travel clubs. U.S. Bank has settled the suit. Hatch and attorneys general in other states are investigating several similar arrangements, including one in which membership fees were added to consumers' mortgages without their knowledge or consent. These revelations caused quite a stir. "Everyone assumed that banks keep this information confidential," says Hatch. "We don't think to call the bank up and say: `Don't do this.' " Congress passed legislation last year that includes some financial-privacy measures. The trouble, say critics, is that the new law legitimizes the merging of customer information. As financial institutions expand and diversify, consumers will have a tough time keeping track of who knows what about them--and who can share it with whom.
Nonetheless, the burden remains on consumers. Here are ways that experts advise safeguarding your financial data:
Don't pass it on. Tell your bank, insurer, and brokerage that you don't want your financial details shared. To avoid a paper trail on sensitive transactions, pay cash.
Read up on yourself. Monitor your credit report annually. Reports cost about $8 in most states. Review every entry on your bank and credit card statements.
Tracking the web of data you weave
Online, you are your data dossier. Most computer users don't realize that Internet businesses are compiling data about them and their Web-surfing history and habits. Even those who are aware of the tactics would be dazed by the sheer bulk of their electronic profile. Web ad placement firm DoubleClick currently maintains over 100 terabytes of storage. If printed out, that would equal about 300 single-spaced sheets of paper for every Web user.