Chartered to protect the henhouse, has the FTC turned into a fox?

Chartered to protect the henhouse, has the FTC turned into a fox?

Summary: I rarely get e-mail from the USA Today's Byron Acohido (who from time to time interviews me for my opinions on tech). But today, Acohido drew my attention to a story that he has co-authored with Jon Swartz under the headline FTC under fire as credit bureaus sell consumers' data.

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I rarely get e-mail from the USA Today's Byron Acohido (who from time to time interviews me for my opinions on tech). But today, Acohido drew my attention to a story that he has co-authored with Jon Swartz under the headline FTC under fire as credit bureaus sell consumers' data.

The story draws attention to a complex Web of potentially conflicting interests involving Federal Trade Commission Chairman Deborah Platt Majoras, the law firm she used to work for, her husband who still works for it, how that law firm represents one of the big three credit reporting bureaus, and whether or not the FTC has morphed into an agent of the credit reporting bureaus' success from the consumer guardian that The People have entrusted it to be.

While the targets of this follow-the-money like inquest deny any impropriety, I can certainly understand the position of Robert Kuttner, author of The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity who, who in response to the USA Today inquiry, said:

Federal agencies that are supposed to be looking out for the consumer are really protecting the companies that do bad things the agencies were set up to prevent.

I felt precisely this way when virtually all the real teeth were removed out of the proposed legislation that eventually turned into the Can Spam Act. At one point, the legislation included language that prevented senders of bulk commercial e-mail from sending that e-mail to anybody but those individuals with which they had pre-existing relationships. In other words no blind prospecting or solicitations of your inbox.

But, arguing that benefits of unsolicited commercial e-mail (aka SPAM) outweighed the harms, lobbyists for the advertising and marketing industry fought tooth and nail to get that piece of the legislation removed and succeeded. It my mind, it was the ultimate selling-out whereby the government ended up representing the interests of big business rather than those of us in consumer-land who must endure those harms -- the worst of which today is that we have no idea whether our e-mails are reaching their intended recipients due to over-zealous spam filters on the other side. It's a mess.

According to the story:

In February, the National Association of Mortgage Brokers lambasted the FTC for giving the credit bureaus tacit approval to keep selling listings — called "trigger lists" — containing personal and financial data of prospective borrowers. Some unscrupulous lenders used trigger lists to contact people who recently filled out a loan application, and then pitched them subprime mortgages, higher-priced loans aimed at people with spotty credit histories but also marketed to borrowers with good credit.

I have been wondering for a while why, during the earlier part of this year, I received so many solicitations promising to beat my current mortgage rate and how these outfits that I never heard of managed to get a hold of the data that was intimate to me. Now I know. In other words, this is unquestionably one of those data stories involving the thorny question of who gets to control what happens to our personal data when. What this story demonstrates (that's not readily apparent to the naked eye) is the role that the government can play in protecting us, or perhaps giving the companies it's protecting us from the carte blanche they want to take advantage of us.

Earlier today, in response to a blog post I wrote earlier this year about the waning anonymity of cash (and how we are sometimes accosted for personal information at the point of sale the way Radio Shack used to do) and how I didn't mind terribly being asked for my zip code, one ZDNet reader wrote to me:

I used to think this information was used so that stores could figure out where there customers were coming from. But I've learned a lot about data aggregation companies like Axciom, Experian, etc. and I've learned exactly how the zip code is used.

The zip code is most useful to the retailer when you use a credit card. Because they have your name from the card, and also have your zip code now, you are generally findable on the massive consumer databases housed at Axiom, InfoUsa, etc. For instance, there is probably only one Keith Goodman in my zip code of 20001. The retailer now has a valuable piece of information that they can sell to a consumer database firm: your purchase history. I don't think they sell the information about the specifics of what you are purchasing, but the general category you purchased. For instance, if you buy something at a sporting goods store, the store probably reports to the database firms that you are "A purchaser of sporting goods." Don't be surprised if you start getting LL Bean, Cabellas, and similar catalogs since the consumer database firms are selling your purchase history to buyers.

Well. Now I have a little bit more insight into why trees are dying to fill my mailbox (snailmail box) with catalogs that I never requested. And they are. I have back pain to prove it (back pain from carrying a recycling bin full of heavy stock catalogs to the curb). All of these stories (including the recent FaceBook Beacon debacle) fall into the same category of APD Syndrome: Abuse of Personal Data. The question is, what will be that next evolutionary step that resets things so that we have the final word on such sensitive information.

Topics: Enterprise Software, Collaboration, Data Centers, Data Management, Government, Government US, Software

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13 comments
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  • You tell me and we'll both know.

    "The question is, what will be that next evolutionary step that resets things so that we have the final word on such sensitive information."

    You tell me and we'll both know.
    roaming
  • It's the golden rule...

    Those with the gold make the rules, has been that way and will continue to be that way.
    mrOSX
    • Informed Voting?

      The only way those who have the Gold can continue to make the rules is if we the voters continue to buy into their propaganda and vote the gold-digging rule makers back into office!

      Impeachment and recall needs to be used more often as well if the don't keep the promises or morals we voted them into office for.

      If you lie on an application for a Government Job don't they fire you post-haste if found out?

      And, what type of public record application is the political process...

      Man we are **so** gullible...

      Of course the real proof of the problem is when Washington wants to gag Grass Roots Truth Talkers.... (By various lobbying reforms...)

      Of all job holders we should be most intolerant of is those that *claim* they want it for the public good!

      Nuff Said...

      Be an INFORMED VOTER and INSIST on KEPT PROMISES...

      Mike Sr.
  • Talk about ads for a minute

    So, I followed the link to usatoday.com and it broke. Who knows why and not important.

    I searched for FCC instead of FTC as a typo on USATODAY. Now, I have to ask, why did I get a nice large photo of Janet Jackson's wardrobe malfunction from the search?

    This is precisely why I strive to block all ads. This sort of offensive garbage.

    Anyway, thanks for the link to the story.
    mtgarden
  • I want to know who's selling my personal info

    Junk mail senders should be required to disclose on the document their source of our personal information. If it's from a trigger list, another company, etc, I want to know who. Then I'd know which companies to stop doing business with (or at least complain about). It should be required on spam too.

    Regarding the zip code, do gas stations really verify my zip code when I pay at the pump? What would happen if I started giving retailers a fake zip code (98765) when they ask?
    I_Rarely_Post
    • Agreed

      You are right. Each mailing should reflect where the information came from. Think individuals would be surprised how little came from the credit bureaus. They have laws that govern the use of info, where others, like Acxiom, InfoUSA, Polk, LexisNexis, First American, McDonald Detweiller, etc. do not. They take public records, match it to zip code info, warranty card info, etc. and create lists. That is where the focus should be to stop the proliferation of junk.
      jmjth
    • Zips and Cards

      Some credit card processors include "address verification" in their service. If you buy with a credit/debit card, that request for zip code may actually go to the card company and be included in the verification of whether or not you can make the charge.

      Give it a try! Give them the wrong Zip. If the card bounces, give them the same card with the correct Zip and you should be on your way.
      donden@...
  • My Two Cents

    Not that it matters much, but here's my two cents. Maybe companies/ISPs/etc should start forwarding all spam, including the stuff that's automatically rejected, to every email address in Washington. I figure a few days of overloaded email servers *might* get through to those who don't have to see or deal with what the average person does. Then again, it would probably result in that particular company/ISP/whatever being federally investigated over some BS charge. The people have no say in what happens in this country any longer. Time to move.

    G
    PCTechG
    • RE: My 2 cents

      Great idea. I am more than willing to go through the 'spam bucket' and forward all that crap selling Viagra and other "pharma deals" to my Senators and Representatives. Maybe then they will get the message. Anyway, AFAIAC, My name is "Mr. Cash".; my zip code is 00666.
      fatman65535
  • Now if we could only get the WHITE HOUSE ....

    If only the rest of the government were this open with
    their/our data!
    kd5auq
  • Message has been deleted.

    UCase
  • RE: Chartered to protect the henhouse, has the FTC turned into a fox?

    The whole idea of selling any personal information should be Outlwed all together. Yes, governmant needs to be reminded that they are supposed to be servants of all citizens, not selective citizens that can benefit any personal or short term to long term employment security or benefit. There should Definitely be strcter guidelines for any Distribution of personal information, not only by the Credit Reporting Bureaus, but anyone, any business, Government agencies or any entity in general.
    Also, there should be a Royalty Fee of 25 to 50
    % of the seeling fee to be paid to the indvidual or business whose information is being sold. this would Definitely need be enforced and with proper enforcement could seriously deter such practices. We also need laws that prohibit both spam email and junk mail
    with leagl counter options and appropriate enforcement. In Oregon, we have a lasw that allows for suing Telemarketing companies and individuals for continued and unwanted phone solicitaion, irregardless of where the Telemarketing company doess business and allows for damages of $500.00 to 5,000.00 and there are several case precedents on the books. In fact, within a year of this legilation, some people had sued several telemarketing companies for $5,000.00 colletive total damages or more.
    thanks.
    spacepioneer
  • RE: Chartered to protect the henhouse, has the FTC turned into a fox?

    Nah. Not going to happen until there's equally big money to throw at the White House and the Congress to block any more erosions of our rights.
    masteroflifeanddeathandpower@...