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Wednesday, April 26, 2006

Junk Mail Ethics

Back in December of 2005, the Direct Marketing Assn. (DMA) published an article on its website that identifies current action against three companies for lack of cooperation in solving matters of ethics. Neither of the companies is a member of DMA, so therefore, they really don’t have to cooperate. They didn’t, and there’s really not much more the organization can do but refer the companies on to the appropriate law enforcement authority.

What the DMA did do in the article, “DMA Releases Latest Ethics Report; Refers Listing Service to FCC,” is compile a list of six issues of primary concern, based on 20 current cases. Based on my 35 years as a broker of mailing lists, I am impressed with the issues, but not moved in the least with what I know of junk mail compliance. Four are worth mentioning, however.

Number one: Customer information should not be readily available for access by other individuals; here they are primarily concerned with services that make this data available online. “Customers would not reasonably expect that information about what they purchased, or how they responded to a marketing survey, would result in their inclusion in an online look-up service.”

One of the most lucrative areas of selling your name and personal data comes from marketing surveys you complete to get free products. OK. We’re all frugal to a point, but if you knew how quick and widely distributed your private information was after filling out these detailed questionnaires, you’d think twice next time.

The giants of this gold mine are Equifax and Experian, both credit reporting firms. Their subsidiaries, Lifestyle Selector and Behaviorbank, maintain databases of your personal data and daily habits, numbering 56 million and 40 million households, respectively. Things like what you read, what you drink, what ailments you have and the medications you take, how you invest, if you smoke and what brand, whether you gamble…and much, much more.

And these aren’t the only companies who assemble and sell this data. Be assured that just about anytime you put your private information on paper, online, or give it up by telephone, it will be collected and sold to the highest bidder. There are billions of dollars to be made, and you won’t realize one penny in the deal. To add insult to injury, you might even suffer identity theft down the line.

Please tell me, what is worse? Making the survey data available to Web surfers online (as is the point of the article’s issue), or selling it to thousands of junk mailers that, as we have already experienced, can lose the data to potential ID thieves? The DMA’s focus is typical of an industry that covets the sale of your name and personal data, and is willing to protect this supposed right at any risk.

It’s already enough that Equifax and Experian turn over this data for the marketing strategies of those companies who provide you the free products. It’s equally troubling that they fail to make it clear to you that your private information will be sold over, and over, and over…ad infinitum.

If you, the consumer, had control over this personal data, there wouldn’t be a problem, and you would be enjoying the fruits of the sale of this data.

Next issue of concern, the “teaser” copy on junk mail envelopes that bribe you to open them.

Wednesday, April 19, 2006

Junk Mail Industry Rag Puts Down Consumers

Direct Magazine, a junk mail industry publication, obviously must back the business it receives its advertising revenue from, but when they belittle the very customers who support Direct’s advertisers, that sucks. It all comes from a recent article on, “No, Consumers Shouldn’t Always Be in Control.”

Right out of the gate they’re wrong. Consumers should have complete control over their names and personal data.

The article comments on Phil Raymond’s concept that e-mail recipients should be paid when they receive e-mail they do not want. YES! Very similar to my theory that consumers should be paid each time their name and private information is sold. Raymond is CEO of Vanquish Labs, and plans to introduce software that will support his concept.

Direct calls the idea interesting, but then states it gets “wackier” and “wackier” when scrutinized. Continuing, they contend there would be a “chilling effect” by letting “unpredictable” and “hair-trigger consumers” make decisions like this.

The put-down progresses to Direct’s conclusion that, “…consumers simply don’t deserve money for accepting e-mail.” Their reasoning is you pay little to nothing for e-mail boxes. What they don’t mention is that junk mailers charge premium prices for the sale of your name with an e-mail address.

According to junk mail list manager/broker Worldata in their latest “List Price Index,” names with e-mail addresses sell for 50 percent more than the average junk mail shopper. Naturally, this segment of merchandising your names and private information is growing at a high rate of 38 percent annually.

Phil Raymond is backed by Boston University economics professor, Marshall Van Alstyne, who did research for the project. See “Boston U. professor to develop anti-spam program.” Reaction is mixed at BU. Most students didn’t think they would charge the spammers, and an engineering junior stated flatly there was no reason to charge for something some people could find “entertaining.” That’s a switch.

This is not just about e-mail lists, or anti-spam, or whether Raymond and the BU professor have a good idea. It is about an arrogant junk mail industry that continues to take the position that it owns your name and personal data, and you, the name-holder, have no rights whatsoever.

This, after over 100 significant data security breaches in 2005, affecting nearly 56 million consumers, while junk mailers and data brokers continue to reap over $4 billion each year from private information they are supposed to protect and don’t want to pay you for. It’s pathetic, and the issue worsens with each new loss of data, compounded by self-serving articles like the one above in Direct Magazine.

There is only one way to solve the identity crisis, and at the same time put some of the junk mail fortunes in your pocket. Pass federal legislation that will give consumers control over their names and personal data, and pay them when it is sold. Click on the following to contact your congressional representatives: House of Representatives; Senators. Folks, I cannot do this alone.

As usual, tell them I sent you.

Saturday, April 15, 2006

Hispanics and a New Independent Party

All of a sudden both sides of the aisle are interested in the Hispanic vote. That’s because they have finally begun to make themselves heard. In the 2000 presidential election, they registered 7.5 million voters out of a possible 13.1 million citizens. This increased to 9.3 million in 2004, out of 16 million, respectively. I bet the recent demonstrations upped this substantially.

We can all remember when the Democrats championed causes for minorities, but barely a peep has been heard from those party members either running for Congress in 2006, or the Presidency in 2008. Republicans do garner some support, but the individual usually comes from a wealthy background or has made it big in business. There is a tendency to forget the little guy, to whom we owe much of this country’s progress.

I won’t get into the legal aspects of the immigration movement since it is just that, a legal issue. However, I will say that federal legislation is desperately needed to determine the status of the 11 to 12 million Hispanics who are here illegally. And, it isn’t likely that Democrats or Republicans have the guts to do what is right. The opinion is based on both parties’ track record in recent privacy legislation, another concern dear to the average consumer.

Perhaps this potential voting block of over 16 million (citizens only) should consider an independent political party as the answer to their problems. It’s not too far-fetched to combine a civil rights movement with a privacy theme, especially since many of the privacy issues apply to minorities. And there are another 25 to 30 million sharing this status that would join the momentum.

Nearly 58 percent of Hispanics registered to vote in 2004, and 81.5 percent of that voted. However, of the 42 percent not registering, just under 38 percent gave the reason that they weren’t interested in the election or not involved in politics. This doesn’t differ much from the total population where 46.6 percent gave the same excuse. But you can take it to the bank that the recent demonstrations have changed at least the Hispanic thinking.

The next move is to integrate all this enthusiasm into one solid cause that stands for individual rights with no boundaries of race, or otherwise. Starting with the demand for personal privacy, every issue that impacts this mandate becomes part of the independent party platform. Immigration and human rights in general would top the list.

Timing is perfect. Every seat in the House of Representatives is up for grabs in November, along with 33 Senate seats. If you don’t have an independent you can vote for in your area, find a candidate who subscribes to the principles of individual rights and encourage them to run.

The latest LA Times/Bloomberg poll shows only 39 percent of Americans approve of Bush as President; 57 percent disapprove. And, these figures are confirmed in AP/Ipsos, and Washington Post/ABC surveys. Congress fares even worse with a 28 percent approval rating; 61 percent disapproval. You can read about this continued Republican slump in an article, “Bush job-approval ratings remain low,” by Jeff Pruzan.

Many voters believe that it is impossible to elect an independent President or majority in Congress. Most of this rhetoric comes from the top echelons of the Democratic and Republican parties, as well as their elected officials. Well, Ross Perot’s almost 19 percent of the vote in 1992 established him as the most successful third-party candidate since Teddy Roosevelt’s 27.4 percent in 1912.

The TV show, Commander in Chief, on ABC, portrays Geena Davis, an Independent, as the President, ushered into office from the death of the former President. The question is…will she be re-elected? But I think we can all agree that in the best of Hollywood fashion, this has been predetermined. The show’s creator and Producer, Rod Lurie, had to have done extensive research into the possibility of the election of an Independent Party President, in order to maintain believability in characters and the storyline.

Does he know something we don’t? Stay tuned!

Tuesday, April 11, 2006

New Regulations Needed to Protect Credit Card Users

My wife made a purchase recently at a farmers market using her credit card to complete the transaction. This is one of those planned events held in shopping centers and strip malls across the country which frequently produces unique items you can’t find anywhere else, made by the very people from whom you are buying. It’s an experience thousands flock to regularly, but it could be a disaster in the making if some changes aren’t made.

In December of 2003, the Fair and Accurate Credit Transaction Act-FACTA was passed, which specifies that no more than the last five digits of your credit card number can be printed when you make a purchase. However, the law governs electronically printed receipts, and doesn’t apply to transactions where the number is either written or executed by an imprint. In other words, thousands of times daily, credit card numbers, maybe yours, are recorded on paper that may or may not be secure.

The merchant used the old-fashioned imprint machine to record my wife’s credit card information, which clearly states the full sixteen digit credit card number. From experience, I know he or she must deposit this receipt to a business account for credit, so, hopefully, it won’t be lost. What worries me is just who, and how many, other people see this number in the trip to the bank.

The “mom and pop” merchants in this country are the very backbone of our great system of commerce. They should be given considerations, but not at the expense of losing my identity to thieves that lurk at every corner…and farmers markets. Folks, they are everywhere, as evidenced by the outbreak of security breaches in 2005. Give them a grace period to comply, like Visa and MasterCard did all the other merchants, and make them stick by it.

You would think that one of the first things lawmakers would do after the recent rash of breaches would be to plug the loopholes of existing law to better protect the consumer. Just imagine that the person who took my wife’s credit card number goes to a bar for a drink on the way to the bank, and someone steals all the daily receipts. Then, multiply that possibility by thousands of transactions like this every day.

ChoicePoint, LexisNexis and other data brokers do pose a huge threat to the security of our identities. They can lose millions of personal records in one quick event—illustrated by CardSystems exposing 40 million credit cards in June of 2005—and need to be controlled to prevent this from happening. But alas, it is not likely, with either current law or the recent blitz of identity protection legislation.

Real security will be accomplished only by individual consumer control over their name and personal data.

The Pittsburgh Post-Gazette printed an article by Robin Sidel from the Wall Street Journal “Identity theft—unplugged,” that quotes some recent figures from Javelin Strategy & Research. Some 29 percent of victims in the survey said their private information was stolen when they lost their wallet, checkbook or credit card. The balance of 71 percent is attributed to someone from the outside initiating the theft.

Most privacy experts agree that a large number of ID thieves get their information from traditional, low-tech sources. Even a family member, friend…or small neighborhood merchant.

It is time to update FACTA and include all merchants, no matter who they are, and seal this big hole in the ID theft dike. In the meantime, if you must make one of these purchases, let the businessperson know that you realize your personal data could be in jeopardy.

Thursday, April 06, 2006

What's Your Name and Private (or Public) Information Worth?

As a junk mail shopper, your name could be worth around $65 to you personally on an annual basis. More or less, depending on how many times you buy. The total take each year on consumers’ names and personal data is $4 billion from junk mailers, a part of their business they would rather you know very little about. With each purchase, you have the option to check that you do not wish your name “shared” with other junk mail companies. They will never tell you that your name and private information is sold, over and over and over.

So you don’t think the $65 is enough to worry about? Then let’s put just half of that $4 billion every year in a simple interest-bearing account until you are age 65. Bingo! Retirees could supplement their retirement income with an average of $607 monthly; again, more or less, based on buying habits. Sound better? It could happen if Congress got off their duff and passed federal legislation giving you control over this data.

And that’s only the junk mailers. Your private and public information is being sold by thousands of data brokers other than ChoicePoint and LexisNexis. The SWIPE Toolkit knows this, and has come up with a great site that shows you just how much you are worth. Go to their calculator and you’ll be blown away by what you see. Click “Data Calculator” first, then, “Launch” on the left and you’re on your way.

Trying it myself, I selected address, date of birth, unpublished phone number, Social Security number, credit records, driver’s license info, and voter registration. Total: $40.25. And, that’s only one report out of thousands that are sold daily. I found the SWIPE Toolkit in a article by Jeanne Sahadi, “You want a piece of me? Pay me.” She is saying what I have been saying for the last several years, that the name-holder should have control over their name and personal data, and be compensated when it is sold.

Sahadi asked Chris Hoofnagle, “who owns this private information.” Hoofnagle, Director of the West Coast Office and Senior Counsel for Electronic Privacy Information Center, replied: “Whoever possesses it.” The EPIC has been fighting vigorously for years to protect your privacy, so you can understand the frustration in this statement.

And yet another new entry into the private information marketplace, reported by Washington Post columnist, Don Oldenburg, in his article, “Everything You Ever Knew About Yourself—for $79.95.” The company is MyPublicInfo Inc., founded in 2004 to provide personal data retrieval services for consumers. I went to and clicked on “Sample” to see what they offer. Folks, it comes out to a list numbering fifteen pages of public and personal data items about your present-day status, as well as your past.

But, you have to give up your name, address, Social Security number, and birth date to get the report. This is the same stuff an ID thief needs to walk away with your identity. They also claim no one else can get your report—the $79.95 charged should be your best protection—and the safeguards look pretty secure. However, their database is out-sourced—there’s that word again—to a firm in California.

Oldenburg quotes Beth Givens, Founder and Director of Privacy Rights Clearinghouse as saying that access ought to be “free of charge, just like they can get their credit reports for free.” I agree, and the way to solve the whole problem is to pass federal legislation that will give consumers control over their names and private information and, at the same time, pay them when it is sold.

There, I said it again.