Of all the massive hacks of recent years, the Equifax hack may be the worst. Some 145 million persons had their personal information stolen. Even though other hacks may involve larger numbers (the Yahoo hack may have victimized 3 billion--yes, billion--accounts), Equifax had the crown jewels: Social Security numbers, birth dates, home addresses and phone numbers, and some credit card account numbers and drivers license numbers. Bad guys can use this information to open phony credit card and other loan accounts in your name, steal your tax refund, grab your Social Security check and get prescription drugs in your name (which could interfere with your ability to get medications and maybe even implicate you in police investigations).
What to do? The best thing is to freeze your credit accounts. These freezes, called security freezes, prevent new creditors and other persons from getting access to your credit information unless you specifically authorize it. It doesn't stop existing creditors and their collection agents, or the government from getting access. But it puts a substantial barrier in the way of fraudsters. It's not perfect--the bad guys might still try to use your stolen personal information to snare your tax refund or your Social Security benefits, or snag some opiods in your name. But a credit freeze is a lot better than the alternatives. Forget about credit monitoring and fraud alerts--they aren't great protection. And a credit lock isn't as good as a credit freeze. Credit freezes give you legal protection under state law, while a credit lock is just a contract with the credit reporting agency that may be difficult to enforce. Credit locks may also cost you more in fees (which is one reason the credit reporting agencies might want to sell you a credit lock).
Credit freezes can be a little inconvenient, because you have to lift them any time you want to apply for credit. But that is a lot less bother than the aggravation of cleaning up your credit after the bad guys have impersonated you (a process that can take months or years).
One more reason to freeze your credit is to make the idiots (the ones that got hacked) change things. The credit reporting agencies and banks and other lenders don't like freezes. They interfere with business and revenue flow. The credit reporting agencies and lenders have a harder time making money if a lot of people freeze their accounts. And that is the point. The current system using Social Security numbers as universal identification numbers has just been blown up by the Equifax hack. For all practical purposes, you have to assume that your Social Security number is publicly available. You have no privacy any more. You're not safe, and your finances are not safe. The SSN system of personal identification is now completely kaput.
Make 'em change. Freeze your credit and take profit opportunities away from the credit reporting agencies, and the banks and other lenders. Faced with a business downturn, these massive institutions will lead the way to change. With the potential loss of who knows how many millions of dollars of profit, they will implement posthaste new and improved systems of personal identification. Either that, or their senior executives' stock options will belly flop. And that they won't allow. So freeze your credit. It might be the best thing you can do right now for your financial privacy.
Showing posts with label Financial Privacy. Show all posts
Showing posts with label Financial Privacy. Show all posts
Monday, October 9, 2017
Monday, January 17, 2011
A Key to Facebook's Valuation
Recent press reports indicate that Facebook may go public in a year or so. Its recently reported private placement deal with Goldman Sachs supposedly put a $50 billion valuation on Facebook. Many think this is an optimistic number. Conventional measures of value are hard to apply to Facebook because it doesn't publicly disclose its finances. Uncertainties about its business model add to the problem. One wild card is the continued evolution of online privacy policies.
In many respects, online privacy is an oxymoron. Every day brings news of yet more security breakdowns and thefts of personal information. There doesn't seem to be a website that can't be hacked into, one way or another.
But online crime isn't the most important factor affecting online privacy. The commercialization of the Internet is far more significant. Businesses that want to sell your personal information will do much more to reduce online privacy than pimply kids eating junk food in front of computer screens.
Banks are starting to place targeted ads in your online statements. If your bank account shows, say, several recent debit card charges for fast food breakfasts, you may be offered a discount on your next Egg McMuffin. Some bank customers may like the idea of getting a discount while they review their account activity. Others will be creeped out by the idea that the most confidential financial information they have is being mined for the further profitability of purveyors of salt, sugar and fat. Many customers would be outraged at the possibility that insurance companies might pay to know about their slovenly eating habits and charge them higher life, health or disability insurance premiums. Actual insurance company access to your bank account hasn't been reported in the news, but don't think insurers--and the websites that are collecting your personal information--aren't pondering the possibility.
Banks have a lot of ways to make money, yet they are trying to profit from selling your personal information. Think of the pressures on Facebook, which has far fewer potential revenue streams than a bank. The most valuable thing Facebook has is the personal information it gathers about its members. If it can't find a way to monetize that data, its future could be difficult.
The FTC is proposing guidelines about online privacy. Members of Congress are getting interested in the issue and may offer legislation. One way or another, the law in this area will evolve and soon. When it does, Facebook's stock market value could rise or fall, depending on what rules are imposed. Indeed, since the monetization of personal information is likely to be Facebook's biggest potential revenue stream, online privacy laws could be crucial to determining the company's valuation.
In many respects, online privacy is an oxymoron. Every day brings news of yet more security breakdowns and thefts of personal information. There doesn't seem to be a website that can't be hacked into, one way or another.
But online crime isn't the most important factor affecting online privacy. The commercialization of the Internet is far more significant. Businesses that want to sell your personal information will do much more to reduce online privacy than pimply kids eating junk food in front of computer screens.
Banks are starting to place targeted ads in your online statements. If your bank account shows, say, several recent debit card charges for fast food breakfasts, you may be offered a discount on your next Egg McMuffin. Some bank customers may like the idea of getting a discount while they review their account activity. Others will be creeped out by the idea that the most confidential financial information they have is being mined for the further profitability of purveyors of salt, sugar and fat. Many customers would be outraged at the possibility that insurance companies might pay to know about their slovenly eating habits and charge them higher life, health or disability insurance premiums. Actual insurance company access to your bank account hasn't been reported in the news, but don't think insurers--and the websites that are collecting your personal information--aren't pondering the possibility.
Banks have a lot of ways to make money, yet they are trying to profit from selling your personal information. Think of the pressures on Facebook, which has far fewer potential revenue streams than a bank. The most valuable thing Facebook has is the personal information it gathers about its members. If it can't find a way to monetize that data, its future could be difficult.
The FTC is proposing guidelines about online privacy. Members of Congress are getting interested in the issue and may offer legislation. One way or another, the law in this area will evolve and soon. When it does, Facebook's stock market value could rise or fall, depending on what rules are imposed. Indeed, since the monetization of personal information is likely to be Facebook's biggest potential revenue stream, online privacy laws could be crucial to determining the company's valuation.
Friday, October 5, 2007
Financial and Personal Privacy
As the use of the Internet extends farther and farther, more information about you becomes available on the world’s largest communications medium. Consequently, the less privacy you have. Personal privacy was once defined by property lines: your home was your castle. Today, privacy is much more a matter of your personal information, and who knows it.
Technology won’t entirely solve the problem. The Internet was designed for communicating information, not protecting it. While legitimate and responsible organizations will constantly strive to improve privacy protections for their customers and constituents, there’s bound to be somebody somewhere who can hack through any technological solution. Identity theft has become rampant.
Don’t rely on the law. The legal system is behind the times in terms of defining and protecting personal and financial privacy in the Internet Age. A sales person cannot trespass on your property and bombard you with sales pitches. But businesses can buy your personal information and use it in a variety of annoying and unwanted ways, all the while increasing the risk that your identity will be stolen. Ten or twenty years from now, the legal system may have caught up with technology and business practices, and constructed strong protection for personal information. Until then, rely more on yourself than the law.
Here are some suggestions:
1. Leave Fewer Footprints. Internet banking and payment systems may be convenient for you. But the reason they’re so prevalent is that they are convenient for banks, utilities, credit card companies, and the other organizations providing them. A large part of the financial system involves bookkeeping, and it’s cheaper to keep books with a computer than with human beings. So the banks, credit card issuers, etc. want you online. The fact that it’s more convenient for you is just a marketing ploy to make you more convenient and profitable for them. But the more your financial life is online, the larger the number of your footprints for online predators to spot and track. Every fall, numerous deer fall prey to people wearing bright orange. It’s usually the incautious deer that end up decorating someone’s wall.
2. Read the Privacy Notices. Banks and credit card companies are required by law to disclose to you their privacy practices. These disclosures are usually made in slips of paper tucked into your monthly account statements, that have an annoying habit of falling out when you open the envelope. It’s almost as if someone wants you to be so annoyed you throw the slip of paper away without reading it. Don’t throw it away. Read it. The disclosures will tell you how much access the bank will provide to others about your account records. Especially important are the disclosures concerning access by third parties. That means the bank may provide your personal information to persons outside the bank. You may have the right to object to some of these third party disclosures, such as those made for marketing purposes. Make sure you object if you don’t like them. Limit the number of organizations that have personal information about you. Reduce the spam, junk mail and marketing telephone calls you get.
3. Don’t Go For 15 Minutes of Fame. Andy Warhol wasn’t talking about something good when he referred to everyone having 15 minutes of fame. Celebrity does more to entertain the audience than elevate the subject. Splattering your entire life on the Internet facilitates identity theft. It also can limit your options. Maybe once you were a beer-swilling gearhead, but today you’re pursuing an MBA with the hope of securing a job with an investment bank. There’s nothing wrong with your ambition. This is America, and it’s the inalienable right of all Americans to re-create themselves. But those photos posted online, showing you stumbling over empty quarter barrel kegs on your way to worship the porcelain goddess, may clash with the pinstriped image you now want to project.
4. Check Your Credit Reports. You’re entitled to a free copy of your credit report once a year from the three credit reporting agencies: Experian, TransUnion and Equifax. Checking your reports doesn’t directly protect your privacy. It just tells you who’s been poking around in your records. But finding that out is the first step toward dealing with improper or unwanted access to your records.
5. Freeze Your Credit History. If you’re a resident of most states, you can freeze your credit history, and make it inaccessible to third parties except with your express permission. We’ve discussed this before at http://blogger.uncleleosden.com/2007/06/protecting-your-credit-files-with-fraud.html. This is a very good idea, because you then control access to some of the most important of your personal information. It creates a little more work for you whenever you apply for credit (because you have to personally lift the freeze to let the potential creditor see your credit history). That can take a few days. But it’s a small price to pay for privacy.
6. Safeguard Your Paper Records. Have a locking mailbox. (A lot of identity theft today still begins with the theft from mailboxes.) Shred or at least tear up financial records you throw away. Have a home safe—you have people coming in to work on your house, clean it, repair the appliances and do a variety of other things; not all of them can necessarily be trusted. Keep the number of credit cards you have down to a minimum. Close out the credit cards you don’t use. This will reduce the quantity of paper records for someone else to steal.
Protecting your privacy takes work. But it's worth it. Repairing your credit history after your identity has been stolen is a veritable task of Sisyphus. Preventing an identity theft takes much less effort than repairing the damage from a theft.
Crime News: Using bugs as mules. http://www.wtop.com/?nid=456&sid=1261401.
Technology won’t entirely solve the problem. The Internet was designed for communicating information, not protecting it. While legitimate and responsible organizations will constantly strive to improve privacy protections for their customers and constituents, there’s bound to be somebody somewhere who can hack through any technological solution. Identity theft has become rampant.
Don’t rely on the law. The legal system is behind the times in terms of defining and protecting personal and financial privacy in the Internet Age. A sales person cannot trespass on your property and bombard you with sales pitches. But businesses can buy your personal information and use it in a variety of annoying and unwanted ways, all the while increasing the risk that your identity will be stolen. Ten or twenty years from now, the legal system may have caught up with technology and business practices, and constructed strong protection for personal information. Until then, rely more on yourself than the law.
Here are some suggestions:
1. Leave Fewer Footprints. Internet banking and payment systems may be convenient for you. But the reason they’re so prevalent is that they are convenient for banks, utilities, credit card companies, and the other organizations providing them. A large part of the financial system involves bookkeeping, and it’s cheaper to keep books with a computer than with human beings. So the banks, credit card issuers, etc. want you online. The fact that it’s more convenient for you is just a marketing ploy to make you more convenient and profitable for them. But the more your financial life is online, the larger the number of your footprints for online predators to spot and track. Every fall, numerous deer fall prey to people wearing bright orange. It’s usually the incautious deer that end up decorating someone’s wall.
2. Read the Privacy Notices. Banks and credit card companies are required by law to disclose to you their privacy practices. These disclosures are usually made in slips of paper tucked into your monthly account statements, that have an annoying habit of falling out when you open the envelope. It’s almost as if someone wants you to be so annoyed you throw the slip of paper away without reading it. Don’t throw it away. Read it. The disclosures will tell you how much access the bank will provide to others about your account records. Especially important are the disclosures concerning access by third parties. That means the bank may provide your personal information to persons outside the bank. You may have the right to object to some of these third party disclosures, such as those made for marketing purposes. Make sure you object if you don’t like them. Limit the number of organizations that have personal information about you. Reduce the spam, junk mail and marketing telephone calls you get.
3. Don’t Go For 15 Minutes of Fame. Andy Warhol wasn’t talking about something good when he referred to everyone having 15 minutes of fame. Celebrity does more to entertain the audience than elevate the subject. Splattering your entire life on the Internet facilitates identity theft. It also can limit your options. Maybe once you were a beer-swilling gearhead, but today you’re pursuing an MBA with the hope of securing a job with an investment bank. There’s nothing wrong with your ambition. This is America, and it’s the inalienable right of all Americans to re-create themselves. But those photos posted online, showing you stumbling over empty quarter barrel kegs on your way to worship the porcelain goddess, may clash with the pinstriped image you now want to project.
4. Check Your Credit Reports. You’re entitled to a free copy of your credit report once a year from the three credit reporting agencies: Experian, TransUnion and Equifax. Checking your reports doesn’t directly protect your privacy. It just tells you who’s been poking around in your records. But finding that out is the first step toward dealing with improper or unwanted access to your records.
5. Freeze Your Credit History. If you’re a resident of most states, you can freeze your credit history, and make it inaccessible to third parties except with your express permission. We’ve discussed this before at http://blogger.uncleleosden.com/2007/06/protecting-your-credit-files-with-fraud.html. This is a very good idea, because you then control access to some of the most important of your personal information. It creates a little more work for you whenever you apply for credit (because you have to personally lift the freeze to let the potential creditor see your credit history). That can take a few days. But it’s a small price to pay for privacy.
6. Safeguard Your Paper Records. Have a locking mailbox. (A lot of identity theft today still begins with the theft from mailboxes.) Shred or at least tear up financial records you throw away. Have a home safe—you have people coming in to work on your house, clean it, repair the appliances and do a variety of other things; not all of them can necessarily be trusted. Keep the number of credit cards you have down to a minimum. Close out the credit cards you don’t use. This will reduce the quantity of paper records for someone else to steal.
Protecting your privacy takes work. But it's worth it. Repairing your credit history after your identity has been stolen is a veritable task of Sisyphus. Preventing an identity theft takes much less effort than repairing the damage from a theft.
Crime News: Using bugs as mules. http://www.wtop.com/?nid=456&sid=1261401.
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