Wealth Is At Risk Due to Privacy Erosion

Posted on September 28, 2011 by Bill Faiferlick

Over 236 million data records of U.S. residents have been exposed due to security breaches since Jan 2005.

In terms of statutory protections and privacy enforcement, the US is one of four of the worst ranking country in the democratic world (2007 International Privacy Ranking). Most Americans should be shocked and alarmed.

In terms of overall privacy protection the United States has performed very poorly, being out-ranked by both India and the Philippines and falling into the “black” category, denoting endemic surveillance. (2007 International Privacy Ranking) The worst privacy offenders (and the US ranks among them) are Malaysia, Russia, China, and Great Britain. Privacy in the U.S. is for all intents and purposes non-existent.

Consider that:

  • Attorneys can instantaneously access any assets you own on the internet.
  • A law suit is filed every 30 seconds in the U.S.
  • Your banker and broker use software to track your transactions for “suspicious” transactions.
  • Under revised laws, your assets can be confiscated without proof of wrong-doing.

Most people assume that the U.S. has strong privacy protection; however, this is not close to being accurate. The 2007 International Privacy Ranking ranks countries based on constitutional protection, statutory protection, privacy enforcement, identity cards and biometrics, data-sharing, visual surveillance, communication interception, communication data retention, government access to data, workplace monitoring, surveillance of medical, financial and movement, border and trans-border issues, leadership and democratic safeguards.  

Some of the conclusions from the 2007 report from “Leading surveillance societies in the EU and the World 2007” are:

  • The 2007 rankings indicate an overall worsening of privacy protection across the world, reflecting an increase in surveillance and a declining performance of privacy safeguards.
  • Concern over immigration and border control dominated the world agenda in 2007. Countries have moved swiftly to implement database, identity and fingerprinting systems, often without regard to the privacy implications for their own citizens.
  • The 2007 rankings show an increasing trend amongst governments to archive data on the geographic, communications and financial records of all their citizens and residents. This trend leads to the conclusion that all citizens, regardless of legal status, are under suspicion.
  • The privacy trends have been fueled by the emergence of a profitable surveillance industry dominated by global IT companies and the creation of numerous international treaties that frequently operate outside judicial or democratic processes.
  • Despite political shifts in the US Congress, surveillance initiatives in the US continue to expand, affecting visitors and citizens alike.
  • Surveillance initiatives initiated by Brussels have caused a substantial decline in privacy across Europe, eroding protections even in those countries that have shown a traditionally high regard for privacy.
  • The privacy performance of older democracies in Europe is generally failing, while the performance of newer democracies is becoming generally stronger.
  • The highest-ranking countries in terms of privacy protection in 2007 were Greece, Romania and Canada.
  • In terms of statutory protections and privacy enforcement, the US is the worst ranking country in the democratic world. In terms of overall privacy protection the United States has performed very poorly, being out-ranked by both India and the Philippines and falling into the “black” category, denoting endemic surveillance.
  • The worst ranking EU country is the United Kingdom, which again fell into the “black” category along with Russia and Singapore.

The conclusions from the 2007 International Privacy Ranking about privacy specifically in the USA are alarming:

  • No right to privacy in the constitution, though search and seizure protections exist in 4th Amendment; case law on government searches has considered new technology.
  • No comprehensive privacy law, many sectoral laws; though tort of privacy.
  • FTC continues to give inadequate attention to privacy issues, though issued self-regulating privacy guidelines on advertising in 2007.
  • State-level data breach legislation has proven to be useful in identifying faults in security.
  • REAL-ID and biometric identification programs continue to spread without adequate oversight, research, and funding structures.
  • Extensive data-sharing programs across federal government and with private sector.
  • Spreading use of CCTV (Closed Circuit Television).
  • Congress approved presidential program of spying on foreign communications over U.S. networks, e.g. Gmail, Hotmail, etc.; and now considering immunity for telephone companies, while government claims secrecy, thus barring any legal action.
  • No data retention law as yet, but equally no data protection law.
  • World leading in border surveillance, mandating trans-border data flows.
  • Weak protections of financial and medical privacy; plans spread for ‘rings of steel’ around cities to monitor movements of individuals.
  • Democratic safeguards tend to be strong but new Congress and political dynamics show that immigration and terrorism continue to leave politicians scared and without principle.
  • Lack of action on data breach legislation on the federal level while REAL-ID is still compelled upon states has shown that states can make informed decisions.
  • Recent news regarding FBI biometric database raises particular concerns as this could lead to the largest database of biometrics around the world that is not protected by strong privacy law.

It does not appear that privacy concerns in the U.S. are going to change any time soon. The GAO has conducted a number of extensive reports on how different government agencies and departments are data mining personal information which can originate from government sources as well as from private sector organizations.

Since September 11, 2001, the government has increased its use of data mining. There are 52 agencies and federal departments that are using or are planning to use data mining. The list of departments is mind boggling as it ranges from the Department of Education, Health & Human Services, Export-Import Bank of the United States, Pension Benefit Guaranty Corporation to the more conventional Department of Defense, Treasury and Homeland Security.

There were 199 data mining efforts reported by 128 departments and 52 agencies. Of the 199 data mining efforts identified, 122 used personal information. Information being data mined could be from the private sector and or from other federal agencies and both could include personal information. Of 54 efforts to mine data from the private sector (such as credit reports or credit card transactions), 36 involve personal information. Of 77 efforts to mine data from other federal agencies, 46 involve personal information (including student loan application data, bank account numbers, credit card information, and taxpayer identification numbers).

At every level, our privacy is being invaded. Our health care records are easily accessible usually with little more than a social security number, birth date and name.

Information is widely available on internet sites to locate data on real estate owned, judgments, divorce, legal proceedings, where you lived, last known addresses, spouses and this is often accomplished by searching for nothing more than someone’s name.

The list is far from exhaustive. Photos sre now routinely taken from cell phones end up on the internet and e-mailed especially on social networking sites. E-mails, financial transactions, cell phone records, phone records, credit card records, investment transactions, affiliate program cards are accessible at the click of a mouse to employees, government and organizations. Social networking especially for business purposes is widespread and an accepted way of doing business in today’s globally competitive economy. Information available on these sites increases the availability of our personal information.

Our telecommunications are at risk as well. USA Today reports that the National Security Agency (NSA) has been collecting, without warrants, the phone call records of millions of Americans, assisted by such phone companies as AT&T, Verizon and BellSouth. The secret program is intended as a means of analyzing patterns to search for terrorist activity, even though most of the data being collected is from people who are not suspected of any crime.

The scope is far greater than the White House has acknowledged; President Bush claimed to only have authorized warrantless eavesdrops on international calls. The NSA’s ultimate goal is to create a database of every U.S. call ever made. Of the larger telecommunications companies, only Qwest, which thought the legality of warrantless information collection was questionable, has refused to assist the NSA.

Asset management and risk protection strategies take on a greater emphasis in light of eroding privacy. Given the current direction of U.S. policy, it would be prudent to consider diversifying assets and future income streams.  The reason is to help minimize the potential exposure from potential unwarranted seizure or outright confiscation of assets, especially because of existing Executive Orders. Under Section 101 (c)(3) of the recently enacted T.A.R.P. legislation, the Secretary of the Treasury is authorized to take such actions, as the Secretary deems necessary to carry out the authorities, including, without limitation, the following: Designating financial institutions as financial agents of the Federal Government, and such institutions shall perform all such reasonable duties related to this Act as financial agents of the Federal Government as may be required.The Secretary of the Treasury without any governmental permission or review can order the outright confiscation of US financial assets.

Additional Links and References

Spying on the Home Front

August 2005 DATA MINING: Agencies Have Taken Key Steps to Protect Privacy in Selected Efforts, but Significant Compliance Issues Remain

DATA MINING: Federal Efforts Cover a Wide Range of Uses