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Tuesday, May 23, 2006

Your secrets for sale

Your secrets for sale -- cheap
By Liz Pulliam Weston
Your unlisted phone number, credit report and other personal records are available for a pittance to almost anyone, via databases that are poorly protected and often incorrect.

You may know that data brokers make big money buying and selling your personal information. Details about your divorce, debt load and driving record sit in computer databases around the country, waiting for buyers.

What you may not know is how much your data is worth: not much.The largest publicly traded data brokers -- ChoicePoint, Acxiom, Equifax and LexisNexis, a unit of Reed Elsevier -- all reported revenues of $1 billion or more each last year, but they make their money with sheer volume. Each bit of your data costs at most a few bucks, and often just a few cents.

Getting your address might cost a quarter. Your unpublished phone number? Anywhere from $1 to $10. Someone can purchase your marriage certificate or bankruptcy records for $3. For $40 to $50, anyone can obtain a relatively thorough background check, which would include your date of birth, phone numbers, addresses for the last couple of decades, criminal record, lawsuits, liens and property ownership (including, often, a map to your house), along with a list of neighbors and possible relatives with their contact information.

These are retail prices, by the way -- what anybody poking around on the Internet might pay. People and companies that buy data in bulk pay much, much less:

  1. You might pay $8 or $9 to look at your own credit report (after you've used up your free annual view that's guaranteed by federal law). A credit card company or major collection agency that buys a million or more reports a year might pay less than 50 cents for the same report.

  2. Anyone could buy your driving record from a background search Web site for $15 to $35, depending on which state you live in. A bulk buyer might pay just $3 for the same report from a commercial vendor.

  3. A variety of Web sites allow users to type in an unpublished landline or cell-phone number to get the owner's name and address, usually for a fee of around $8. Such reverse lookups cost bulk buyers 15 cents to 75 cents.
Easy access, unregulated industry"I doubt that people could be aware of how cheap (their data) can go," said Evan Hendricks, editor of the Privacy Times newsletter and Web site and author of "Credit Scores and Credit Reports." "It's a very competitive market, and the information is all electronic."This carnival of cheap data is made possible by two developments: the spread of the Internet, which has made collecting and disseminating data much less expensive, and the creation of software that allows simultaneous searches of multiple databases.Information that was once stored in dusty file cabinets or inside government or corporate mainframes is now digitized, cross-referenced and easily accessible.Much of the data is initially collected for legitimate purposes: for employment screening, insurance underwriting, credit checks, debt collection, law enforcement. But once collected, the data may be purchased by smaller, Web-based data resellers, some of which are shady operators with phony domain registrations and no ethics about what they sell to whom."It's a yucky, yucky world," said Bob Sullivan, author of "Your Evil Twin: Behind the Identity Theft Epidemic." "The whole industry is not regulated at all."Available to anyoneThere are some restrictions, at least theoretically, on who can look at certain data. Your credit report, for example, under federal law is supposed to be pulled only by those with a "legitimate business need," which can include:

  1. Creditors and those considering granting you credit

  2. Landlords

  3. Employers and potential employers

  4. Insurance companies

  5. Government agencies
Of that group, only employers and potential employers are required to get your written permission, although in practice most potential creditors, insurers and landlords pull your report only after you've made an application.Still, many data resellers simply rely on buyers' assurances that they have a "legitimate business need," privacy experts say."It's in many respects a meaningless protection," said Beth Givens, head of the Privacy Rights Clearinghouse. "It's not all that difficult to get this information."And much of what's available from data brokers is pulled from public records --courthouses, county tax assessors, Department of Motor Vehicle databases -- that have few if any limits on how the information can be used.Other data you might think is private, like unpublished phone and cell numbers, are purchased in bulk from phone carriers and resold at will.Data brokers say all this cheap data is actually a boon to consumers because it facilitates transactions and help prevents fraud:

  1. Credit bureaus say their data allow lenders and merchants to extend more credit because they're able to winnow the good risks from the bad.

  2. Employment screeners say they help keep pedophiles out of day-care centers and thieves away from cash registers.

  3. Background-check companies say they can help track down deadbeat parents, criminals and debtors, making for a safer and fairer society.

ChoicePoint, in fact, says 60% of its business relates to "consumer initiated" transactions: providing background checks for a job application, tenant screening for a landlord or information to help an insurer underwrite a policy. Another 5% of ChoicePoint's business involves supplying information to law enforcement agencies, while 6% involves risk mitigation and fraud prevention. (A further 9% involves marketing to consumers who've given their permission to be contacted for various goods and services, said ChoicePoint spokesman Chuck Jones, while the final 20% relates to software and technology services that don't involve personal data.)

Easy to steal and full of errorsChoicePoint, of course, was famously targeted last year by identity thieves who posed as legitimate business owners and who accessed the personal information of about 145,000 consumers. The company has since shut down the affected unit, which provided information to small businesses, and placed new restrictions and auditing procedures on its clients.LexisNexis was also targeted by cyber-criminals who compromised legitimate customers' logins and passwords to access personal information, including names, addresses and Social Security numbers, of as many as 310,000 people. LexisNexis also said it has beefed up its security and authentication procedures.Identity theft isn't the only potential problem with these vast databases, however. Information collections can be goldmines for the vengeful and the deranged. Stalker Liam Yoeuns used data broker Docusearch to track down Amy Lynn Boyer, a woman he'd been obsessed with since high school, in 1999. After getting Boyer's Social Security number and work address from the company, he drove to Boyer's workplace and fatally shot her, then himself.A more common but still serious problem is errors in the information or how it's compiled. Givens said her clearinghouse is frequently contacted by people who have discovered erroneous criminal records turning up in their background checks.

Victims of such errors often have little recourse, Givens said, since there's no federal statute that guarantees them the right to a correction."It's up to (the data brokers') computers and algorithms to decide what information goes into whose file," Privacy Times' editor Hendricks said. "There's no one auditing this on behalf of consumers."So what's a consumer to do? You can't opt out of these databases. As soon as you're born -- and a birth certificate is issued -- your information becomes part of the system. Your subsequent actions continue the paper trail: getting a driver's license, a diploma, a job, a car; registering to vote; applying for an insurance policy; buying a home; and finally dying -- all generate data that can later be bought or sold.But you may be able to pressure your lawmakers to put some limits on an industry that's grown up without any. And you should be given the right to access and correct what these brokers are saying about you."Every year, you should be able to ask any of these companies to give you its report on you (for free), just like what we have now with credit reports," Sullivan said, "and there should be some way to fix it."

Liz Pulliam, Moneycentral

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