Debt collectors mining your secrets

Gibbs gets a call from a debt collector and learns about skip tracing and the largely unregulated industry behind it.

A couple of weeks ago in Gearhead I became engrossed exploring Google Docs and reader Stuart Douglas from Cleveland,  responded: "I have to agree that Google Docs is pretty cool, and very handy, but the thing I keep coming back to is trust. Can I really trust that my data is only mine when it's stored outside my jurisdiction? For the time being, nothing too sensitive gets stored there."

Douglas is probably pretty wise to use Google Docs with caution as it is one thing for Google to claim it does no evil and quite another for it to commit to keeping your secrets.

When information lives in the cloud, no matter who owns the cloud, it is hard to commit to maintaining privacy. But the problem with this is that there are now so many sources of data, both public and private, managed by so many organizations, that all of our private details are up for grabs.

Consider this. A few days ago I got a call asking for my wife (although the caller was apparently semi-literate as she mispronounced her name). I said that my wife was out and asked if I could help. Without explaining why, the woman asked if my wife knew a "Martha Samuels". I responded by asking who the caller was and why she wanted to know. It turned out the woman worked for Integrated Portfolio Management, a debt collection agency in Illinois, which used to be called Stanley Weinberg & Associates.

I told the woman that my wife knew no one of that name and asked why she thought my wife might? To shorten the story, it transpired that the company had what the woman described as "software" that mined some unspecified data and had concluded, totally erroneously, that there was some kind of connection between "Martha Samuels" and my wife.

I couldn't get any more information out of the woman other than the name of the company she worked for and its phone number, so I went to look for it on the Web. As it happens, the company doesn't have its own Web site and you have to do a little sleuthing to find out more. I uncovered a useful site, budhibbs.com, run by (surprise!) Bud Hibbs, a consumer advocate who has a lot to say on the topic of debt collection.

Hibbs' site also has much to relate on the topic of Stanley Weinberg & Associates and none of it good. He told me any debt collection company has access to an incredible amount of personal data from hundreds of possible sources and the motivation to mine it.

What intrigued me after talking with Hibbs was how the debt collection business works. It turns out pretty much anyone can set up a collections operation by buying a package of bad debts for around $40,000, hiring collectors who will work on commission, and applying for the appropriate city and state licenses. Once a company is set up it can buy access to Axciom and Experian and other databases and start hunting down defaulters.

So, here we have an entire industry dedicated to buying, selling and mining your personal data that has been derived from who knows where. Even better, because the large credit reporting companies use a lot of outsourcing for data entry, much of this data has probably been processed in India or Pakistan where, of course, the data security and integrity are guaranteed.

Hibbs points out that, with no prohibitions on sending data abroad and with the likes of, say, the Russian mafia being interested in the personal information, the probability of identity theft from these foreign data centers is enormous.

So, after all that I not only find that I agree wholeheartedly with Douglas but I'm starting to think that the whole idea of stepping "off the grid" could be a smart move. Next week: What would it take to become invisible?

Gibbs hides out in Ventura, Calif. Expose yourself to backspin@gibbs.com.

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