Warning if you don't open (and respond) to snail mail from American Express, they will sell your personal information!

I get snail (mostly junk) mail from credit issuers, daily. Being concerned about identity theft and my personal privacy, I try to shred all of them. But am I doing the right thing? As you will see, some of them probably hope I never do.

Here is what happened to someone, who is a lot more diligent than I am (he actually opens the mail). Christoper Null (ATT/Yahoo Tech blogger) got his most recent privacy notice from American Express, which informed him if he didn't want all of his personal and financial information sold, he needed to opt-out with them.

They gave him two methods to do so, snail mail and a 1-800 number. Chris selected the 1-800 number and here is what happened:

I call (800-297-8378 if you want to try it for yourself). I get a recording welcoming me American Express and notifying me that the call could be recorded... thenabruptly says: "The computer system needed to answer your questions is not available." And it hangs up.

Now I understand computers go down, but that was five days ago, and I'm still getting the recording. Will it ever come back online or is it all a scam? The paranoid side of me believes that there is no computer connected to this 800 number, and that it's designed to trick me into forgetting about the entire matter and being too lazy to fill out the paperwork so I'll remain opted in.

According to several comments on his post, the 1-800 was down for quite awhile.

He later (being the saavy tech guy he is) tried to go to their webstite to opt-out and was only able to opt out from electronic, not snail communication.

Very REVEALING post from Chris, here.

It is pretty scary that credit card companies require us to opt-out, and if we don't, they sell our information to, anyone and everyone. After all, selling information, is highly profitable.

The Personal Finance Blog did a post about how much personal information is worth (retail-value), here.

The post is about a year old, and the prices might vary, depending on who is selling it.

I guess the finance industry has found a way to get around recent privacy concerns, and they do it under the guise of a privacy notice!

It's no wonder there is so much identity theft!

Why don't all the identity theft statistics say the same thing?

Consumer Affairs wrote an interesting article about all the recently released identity theft surveys.

Martin H. Bosworth reports:

The financial services industry, hoping to befuddle the new Congress, has been busily laying down a smokescreen claiming that identity theft is on the wane.

But the Federal Trade Commission's latest compilation of consumer complaints and a survey by the National Crime Prevention Council should do much to clear the air.

Martin's article, here.

Who should we believe, the government, or the financial services industry?

The civil servants behind the government surveys have no financial interest in all of this. On the other hand, the financial services industry have a huge financial interest. At least as long as they can still profit by writing all the losses off.

It's going to cost them some of their (hefty) profit margins to properly protect all the information they've been data-mining on all of us for decades. It also might force them to be more responsible when selling their products.

Interestingly enough, privacy and consumer advocates all seem to agree with the government.

Of course in any statistical analysis, there are a lot of unknowns. The Privacy Rights Clearinghouse regularly updates their statistics about how many people's personal information has been compromised in February, 2005.

They admit that their analysis might not be 100 percent accurate when they state:

The running total we maintain at the end of the Chronology represents the approximate number of *records* that have been compromised due to security breaches, not necessarily the number of *individuals* affected. Some individuals may be the victims of more than one breach, which would affect the totals. In reality, the number given below is much larger. For many of the breaches listed, the number of records is unknown.

It's also come to light recently that there is a flourishing market on the Internet, selling personal and financial information (wholesale), in underground chat-rooms.

This might support some of the data the Privacy Rights Clearinghouse has been compiling.

Of course, the people involved in this activity are unlikely to comment, or provide statistics of their own. I don't think it would be in their best interest to do so.

Doing so, might hurt their money flow, or cause them to lose their freedom.

The problem is that too many people have financial interests in what some of these surveys are selling to the public.

I think the Latin phrase, caveat lector (reader beware) certainly applies in this instance. I have a hard time believing what I read in some of this statistical analysis.