Consumer Privacy

Current laws fail to protect consumers from having their personal information gathered. This has lead to identity theft as well as personal financial ruin. There have been federal laws enforced by the United States, such as the Fair Credit Reporting Act passed in 1970 and the Fair and Accurate Credit Transactions Act passed in 2003, which are meant to regulate the collection and use of consumer information. Unfortunately, since their enforcement our government is still having trouble protecting consumers from fraud and identity theft. Since 2005, over 350 million personal records have been stolen in the United States (“Big Brother”). On top of that, 1,000,000,000 names and addresses have been sold to companies using the information USADATA and infoUSA has found on envelopes (Cheng). Many companies will collect your information without notifying you; this is common with online companies that store your browsing history and archive your information through surveys, warranties, and credit card transactions (“Big Brother”). The next time you are filling out an online survey or signing up for a website keep in mind that the information you are sending to them can and oftentimes will be stored in a database for as long as they see fit. I believe that the United States government is doing a fine job preventing identity theft and illegal collection of personal information, but obviously they are not doing enough to ensure the privacy of consumers like you and me.

In an article from the scholarly journal “Consumers Union”, companies have been found to be using under handed ways to collect and archive your personal information through your credit history, insurance claims, health history, checking accounts, background history, purchased items, rental history, and even mailing lists (“Big Brother”). While some companies respect their consumers’ privacy, some have been known to actively purchase personally identifiable information from other companies and organizations. It was found that over 1,000,000,000 names and addresses have been sold through organizations such as USADATA and infoUSA (“Big Brother”). The Fair Credit Reporting Acts gives companies the go ahead to purchase your information if they are considering transactions with you in a related manner. This federal law was enforced in 1970 with hopes that it would be an affective form of regulation, but over the years it has been stretched and bent to give companies access to your information so that they can make predictions on the likelihood that you will be coming to them for business (“Big Brother”).

It was stated by the “North Carolina Banking Institute” journal that the personal information of over 350 million consumers have been stolen since 2005 and that from 2006 to 2007 about 15 million United States citizens had to deal with a stolen identity and lost a cumulative $5 billion (Cheng). In the years following those numbers have continued to rise and the level of consumer awareness has not gone with it. As our current federal laws have been failing to provide a protection net for us consumers we should consider ways to protect ourselves and take the time to learn about the ways that our information has and is being harvested. Although companies are required to alert you if there is a data beach, you can prevent a harmful identity theft by freezing your credit as well as limiting your paperless purchases (Cheng). Freezing your credit is a smart thing to do because criminals with access to your personal information have been known to open new credit accounts and attempt to take out loans and by freezing your credit you can stop those things from happening because there are not many companies out there that in this modern day will hand out credit without viewing your credit score beforehand (Cheng). It was found that only 41% of people feel like they have control over their personal information and how it is being used (“Consumers Like Firms”). I believe that stricter laws and a national credit freeze needs to be used so that consumers can be protected from identity theft and future ramifications because only 46 states currently are required to notify their consumers when their personal information has been lost or stolen (Joerling).

As of 2011 there isn’t a U.S. law that currently keeps consumers safe while online (“United States Moving”). Businesses have been using that to their advantage and have been known to monitor consumers’ buying and selling habits, then turn around and sell that information to a different business (“United States Moving”). The Federal Trade Commission acts as a stand-in Internet police, but unless an incident of maltreatment or a transaction is labeled as deceptive, they can’t do much to help (“United States Moving”). Many people do not know when a business is required to ask for a consumers’ personal information and when they are not required to do so. A perfect example of this is through the interview process at a new job, you are not required to enter your Social Security Numbers on a resume or application. Another example of this is through the public school system, currently 26 states collect students’ Social Security Numbers even though they are it is not required (“Schools Putting Kids”). A lot of the time there is nothing to worry about, but one thing to keep in mind is that in March of 2010 approximately 3.3 million student loan records were stolen from a United States building; according to the Privacy Rights Clearinghouse Report (“Data on 3.3 Million”).

Companies that give their consumers’ a feeling of control over their own personal information are rated higher than companies that do not, according to a survey in the “Information Management Journal.” Among those companies that let the consumers feel like they are in control are American Express, IBM, Johnson & Johnson, Hewlett Packard, and eBay. They have been rated as the safest and more respectful of consumers’ privacy (“Consumers Like Firms”). The companies listed above are doing well for themselves and that goes to show that even though our government may fail to protect consumers, there are still respectful companies out there. Some of the credit for trustworthy companies may have been put in place by the Red Flag rule, which forces companies to create identity theft prevention programs and use them to exploit identity theft attacks (“FTC: ‘Red Flags’). Companies that take this seriously tend to have a loyal customer base.

In conclusion, my research has found an inadequate amount of government involvement and protection for our consumers and that there are companies taking advantage of current laws so that they will be able to earn money, even through less than respectful methods. Although there are federal laws that regulate the trade and selling of personal information, companies have been able to bend and stretch the rules and as of 2011 there isn’t an active U.S. law that really keeps consumers safe while online (“United States Moving”). Companies have been using that to their advantage and have been known to monitor consumers’ buying and selling habits, then turn around and sell that information to a different business (“United States Moving”). If I owned a company I would run it honestly and fairly as companies that give their consumers’ a feeling of control over their own personal information are rated higher than companies that do not (“Consumers Like Firms”). As a consumer you need to be wary of the ways your personal information can be gathered. Since 2005, over 350 million personal records have been stolen in the United States and current laws are failing to protect consumers and their privacy (“Big Brother”). Many times you give companies personal information without even knowing it and that is how some people have had their identity stolen. After you give information to a company they can do whatever they want with it and a lot of the time it is abused or use for purposes unrelated to why you gave it to them (“Big Brother”).