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Saturday, June 18, 2005

Identity Theft: Off-Shore Warehousing, Outsourcing, Off-Site Storage. This Just Means Your Name and Personal Data Are All Over the Map

It may already be necessary to include an amendment to my proposed federal legislation that gives consumers 100% control over their name and personal data. Although identity theft from the loss of your private information has reached epic proportions in the U.S., it could now be traveling overseas. The amendment would be written to include all personal data outsourced by American companies in foreign countries.

But the problems abroad are covered more than adequately in BloggerRadio.com’s latest entry: Advance Warning: Lobbyists Don’t Want Us To Own Our Own Identities, and are moving data offshore to avoid regulation. Read it. The piece makes an excellent point. Most of us are too busy with our jobs and personal life to take the time to explore what is going on in the marketplace with our private information. Folks, it is everywhere, ripe for identity theft. And you had better get behind this grass roots effort or risk living through a commercialized, Orwellian 1984.

Today, I want to talk about just how wide a presence your name and personal data have among the thousands of junk mailers and their affiliated off-site repositories. First, let me identify the players. You have the seller of merchandise or services: catalogs, insurance companies, etc. Next comes the computer facility where your name and private information are stored. Following is another computer workplace where the seller will send its list of names to match against all the millions of your names it has purchased to mail, with the intention of eliminating the duplicates. It’s called a merge/purge.

To complete the cycle, you have the hucksters of your name and personal data: the List Manager, the one who promotes mailing list names, and the List Broker, my former occupation, the one who actually sells your name and data. That’s the team, but as an aside, it is interesting to note that list brokers are considered the prostitutes of the industry. (Remember, I was one myself) Like the “ladies of the evening” on Lexington Avenue in New York, they would do anything to make the sale.

Now let’s review. Your name and personal data (the list file, it’s called) are housed with the seller, of course. The computer facility that maintains the seller’s list has a complete copy. The other computer workplace doing the merge/purge also has the file. And, even the list manager or list broker could have a duplicate of the list file. In every case, except for the merge/purge location, there is also an off-site copy of all names and personal data. That’s a total of seven.

When you multiply this by several thousand junk mailers, and then compound that by the delivery companies that are necessary to transfer the list files between facilities, you can understand how easy it might be to steal or lose the data. The perfect formula for identity theft. UPS has taken the blame for losing 3.9 million CitiFinancial customer records. The financial giant has just announced it is dropping backup on computer tapes and is sending everything to credit bureaus electronically, after encryption.

Because of the cost of the technology involved in electronic encryption, and the fact that some companies have not yet squarely faced the consumer privacy issue, the junk mail industry as a whole is not likely to embrace this move. In my thirty-five years as a name hawker, I never felt we got out of first gear, even with incident after incident of compromised data. Even today with identity theft the number one consumer complaint, many of those old junk mail entrepreneurs are just burying their heads in the sand, hoping it will go away.

And, if pirating your name for financial gain weren’t enough, at least 98 pieces of junk mail out of 100 end up in the city dump. If you’re an environmentalist, try and equate that to what you receive. According to a report from the Alliance for Environmental Innovation, catalogs alone utilized over 17 billion names in 1999 to reach their destinations. This organization is concerned about the loss of 3.35 million tons of paper to produce those catalogs. Anyway, what kind of business would tolerate a return rate on its advertising of less than 2%, from its infancy to present time?

So let’s get back to basics. Join my grass roots effort to pass federal legislation that will give you 100% control over your name and personal data. The above incidents may still occur, but with my system of checks and balances, you will not be the one to suffer. And as you can find in earlier posts, you would also share in the wealth of the sale of your name and private information.

Let me know what you think. I want to hear your comments!

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