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HSFPP Weekly Update # 170—Your Privacy Rights at Risk

Message from Bob: The LifeSmarts Consumer Program began this month, and you can learn more about it through our Web Site Picks of the Week. The LifeSmarts program is a fun way to reinforce the HSFPP consumer-related lessons in a game show format. For county 4-H agents and high school Family and Consumer Science teachers, it reinforces all the content you might cover in various classes and programs. Students will enjoy it because they compete in four-person teams, with alternates, and can enjoy working with their friends. Competition closes Friday, February 2, 2007. The teams with the highest scores in the computer competition will meet for the state competition in Frankfort on Thursday, March 8, 2007. The national LifeSmarts competition will be held in Orlando, Florida, on April 21-24, 2007, all expenses paid, including the coach.

Part of this week’s student activity is the LifeSmarts practice quiz.

 

Web Site Picks of the Week:

http://ag.ky.gov/consumer/lifesmarts/
The Kentucky Attorney General’s Office provides this LifeSmarts consumer competition page on their Web site.

http://www.lifesmarts.org/
The official LifeSmarts Web site provides all the information you will need about the program. You can take a practice quiz and register for the competition there. They also provide tips for students and teachers. This site can also be accessed from either tips page of the Kentucky Attorney General’s Web site. Along with the HSFPP, LifeSmarts is a great way for teens to learn about consumer issues.

 

In the New$... Your Privacy Rights at Risk

by Robert H. Flashman, Ph.D., University of Kentucky Cooperative Extension

You know from last week’s story, which included news about America Online’s (AOL’s) release of search queries for 650,000 of their customers, that identity theft is a major problem and that we all need to protect our personal information in order to reduce the likelihood that we will be victimized. But do you have access to all your personal information? Do you have any way of knowing all the places where your personal information is right now? And do you know who is looking at your information, and for what purpose? The answer to all these questions is no.

According to the October 2006 issue of Consumer Reports, plenty of companies exist purely to make money off consumers’ personal information. They pay investigators to find out whatever they can about you, your buying habits, your political party, your health, and other sensitive information such as your Social Security number and your date of birth. The information they have on you can be used to steal your identity, and it can be used by enemies to stalk you. It also is used legally by potential employers and landlords to help them decide whether to offer you a job or to allow you to rent an apartment. Incorrect information can not only prevent you from being hired or finding a place to live, it also can be used to classify you as a security risk or to place you on a no-fly list. While it is good in today’s world to know who really is a security risk, we all want to prevent law-abiding people from being denied opportunities and/or being investigated needlessly.

Consumer Reports says, “Federal privacy and data-security laws such as the Fair Credit Reporting Act and the Gramm-Leach-Bliley Act do guard some categories of data, including information used to determine eligibility for credit or insurance. But a 2006 investigation by the U.S. Government Accountability Office (GAO) concluded that such protections are limited and that Congress should require information resellers to safeguard all sensitive information.”

These companies “wouldn’t exist if there weren’t data for them to ingest. Fortunately, for them, the richest resources—public records—are increasingly accessible. Some hire researchers to visit courthouses and county clerks’ offices to retrieve information from paper records, but increasingly, state and local governments post records online, making data gathering simpler and less costly for everyone. Open access also increases the potential for misuse of sensitive information. Property deeds, tax liens, and marriage and divorce documents often contain Social Security numbers, dates of birth, and other sensitive information that are golden keys for identity thieves.”

Hired snoops aren’t the only ones responsible for our privacy crisis, however; consumers give out far too much information on themselves through catalog purchases, magazine subscriptions, membership in associations, and answering surveys, for instance. This isn’t to say that you should not subscribe to publications or join organizations, though; both are essential for professionals’ careers. You should, however, know what you are getting into in each consumer transaction and be wary about how much and what information you give. You never know where it will end up.

Do you, for instance, really want to sign up for a member card at a supermarket? It’s the way to save money and get in on all their bonuses, but it comes with risks. Supermarkets used to have advertised sales that were open to anyone, but now, through member cards, they are able to make special offers only to regulars and, at the same time, accumulate much information about their customers’ buying habits. It helps with their marketing and also enables them to engage in direct marketing. And they can sell the information you give them to other companies. Not only that, if you get your prescriptions at your grocery chain and they are bought by an insurance company, that insurance company could find out, for instance, that you have high blood pressure and high cholesterol, but still eat a lot of bacon; they could use your bad habits against you to raise your insurance rates or to deny you insurance altogether. (For more information on supermarket cards, look at Kentucky Cooperative Extension’s publication, “Privacy: A Balancing Act,” available online at the address given below.)

Under the law, companies must send their customers a notice detailing their privacy policies; financial institutions are a prime example. Most consumers are not aware that they must tell companies they deal with not to share their personal information; and many who are aware of this don’t bother. Take the time to opt out; you don’t know where your information will end up or what it will be used for, so it’s worth it.

Also, according to Consumer Reports, “Federal Law gives you the right to view data that will be used for certain purposes, such as background screening to determine your eligibility for insurance, a job, or an apartment rental. But there’s a lot that the law doesn’t cover.” When Consumer Reports staffers requested their own records, they were given far less information than companies’ business clients would get, and there were many mistakes. Considering that these companies accept no responsibility for correcting errors, it can be very difficult for consumers to make changes.

Since last week’s story about identity theft, there has been further news about a scandal that has been brewing at computer company Hewlett Packard (HP). HP hired a subcontractor to investigate leaks of information from their Board of Directors, but that has only led to more trouble for the company. According to PC World, investigators “got access to the phone records of company board members and reporters by posing as the people involved, using a technique known as ‘pretexting.’” This means that they posed as those board members and reporters, as well as their family members, in order to get the phone records, which is a form of identity theft. The fact that the people involved were board members and reporters, and not HP customers, might not be very comforting to customers who counted on HP to maintain its past commitment to customer privacy. As Harry McCracken of PC World notes, “Evidence that a company takes privacy seriously is a strong argument for becoming its customer; signs that it doesn't are reason to proceed with caution.” It remains to be seen whether HP will come clean about their responsibility for this privacy violation. And, although this violation might be seen as an “inexplicable aberration” on the part of HP, such violations by other companies and organizations occur frequently, posing an ongoing threat to consumers’ identities and their privacy.

Sources: (1) “Your Privacy for Sale,” Consumer Reports, October 2006, pp. 41-45;
(2) “Privacy: A Balancing Act,” by Robert H. Flashman, University of Kentucky Cooperative Extension Service, April 2004. http://www.ca.uky.edu/fcs/FACTSHTS/FAM-RHF.130.pdf; (3) HP’s Privacy Fiasco,” by Harry McCracken, PC World, 9/09/06, http://blogs.pcworld.com/techlog/archives/002726.html

 

Discussion Questions:

1.) How do you feel about companies profiting from your information, but not allowing you to know what information they have on you?

 

2.) Should there be restrictions on what kinds of consumer information companies can collect and what they can do with the information? If so, what restrictions?

 

3.) What do you think is the best way to prevent identity theft? And who do you think should be responsible for protecting consumers?

 

4.) How do you plan to protect your personal information and identity?

 

Activity for Students:

Register to take the LifeSmarts Practice Quiz at the following Web site: http://www.lifesmarts.org/gameNEW/

Select your own username and password and be sure to remember them. Then take the quiz and print out your results, along with the page that gives correct answers to any questions you got wrong, and bring these to class.

 

Kentucky High School Financial Planning Program

http://www.ca.uky.edu/fcs/hsfp

The purpose of the HSFPP weekly financial updates and Web site is to assist county Extension agents, credit union educators, high school teachers, and parents who home school their teenagers so that they may improve the economic well-being of our teenagers; and also to show educators how the HSFPP and the weekly updates meet Kentucky core concepts. The Web site and weekly updates are provided by the University of Kentucky Cooperative Extension Service, and are free to all educators. The list of core concepts and order form for free program materials including the student guide and instructors manual can be found on the Kentucky HSFPP home page.