Data selling hurts buyers Information: The unregulated collection of facts about consumers raises privacy issues.

July 06, 1998|By Dan Gillmor | Dan Gillmor,KNIGHT RIDDER TRIBUNE

I'd heard that I could get very cheap long-distance phone rates if I signed up for service on the Internet. It was true, but in the process I was reminded how casually many companies regard consumer privacy.

AT&T was absolutely unwilling to process my order without my social-security number, a demand that was entirely unreasonable. When I raised privacy concerns, an AT&T customer-service agent blandly cited "company policy" and offered no plausible justification.

So AT&T lost a long-time customer. I signed up for MCI's service, which turned out to be slightly cheaper. MCI also asked for my Social Security number in a follow-up call to verify my order, but didn't press the matter when I refused.

We all got another consumer-privacy reminder not long ago when the Federal Trade Commission lambasted the commercial online industry for its generally loose policies on collecting and using consumers' personal data - and in particular for wheedling personal information from children.

The report was useful enough, though its relatively narrow focus missed a larger issue. Internet abuses are only the latest example of a long-running scandal: Consumer data in this nation is widely regarded as a product to be bought and sold; real privacy rights for consumers are the exception, not the rule.

Your life is a commodity for America's marketers and busybodies, and increasingly an open book. If you aren't extraordinarily careful about giving out information, your habits and purchases become fodder for utter strangers.

The availability of personal data isn't all bad. Some legitimately belongs in the public domain, such as real-estate sales records and rolls of registered voters.

What most consumers don't realize, however, is how much information they tend to give away - and how far that data tends to spread.

If you buy a product and fill out a warranty card, for example, you're typically providing information not just to the seller of the product but also companies that sell information about consumers to other companies. If you subscribe to a magazine, other publications will find out. And so on.

Companies rent and sell consumer data to companies that want to sell you things. To the extent that marketing targets people who might want to buy something, it can be useful - and maybe even be environmentally friendly if it saves trees that would otherwise go into unwanted mailers and catalogs.

But it's becoming dramatically easier to build up astonishingly complete dossiers on individual consumers. And there are almost no sensible controls over how data may be used once it's collected.

One fast-growing crime in America is identity theft, where a criminal gets an individual's Social Security number plus other key information - this is frighteningly simple to obtain from commercial databases - and then opens new lines of credit in the unsuspecting real person's name. You may not directly lose any money if this happens to you, but your credit record can

suffer huge damage, and you'll undoubtedly spend countless hours trying to clean up the mess.

Unfortunately, the law may not consider you the victim in such cases. The credit issuer tends to be the official victim. But who's really hurt the most? Credit-card companies do try to prevent fraud, but they charge such high interest rates in part because they build the cost of rampant fraud into their fees. Your life may be turned upside down if someone steals your identity, but hey, that's the cost of easy credit, right?

The Internet has changed the situation, but not in ways that justify death-to-the-Web panic. The Net's ubiquity has spurred some database companies to sell information online. This widens the potential for abuse but doesn't fundamentally change the nature of the abuse. Companies still pry, and consumers still hand over information with little thought, in real life as well as cyberspace.

I'm not convinced that American consumers are remotely fed up with the data collectors and sellers. We haven't had enough victims yet. But the more people learn about how public their private lives are becoming, the more they want someone to do something about it.

By all means, let's insist that Web sites - and any other entities that deals with children - stop collecting personal information from kids without express permission from parents. But even if we do, let's not assume that we've solved the bigger problem.

Send e-mail to dgillmojmercury.com.

Pub Date: 7/06/98

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