Theme of the Year #2: Cards, Credit, ID Theft, and All That

Continuing my review of the year via a review of this blog that I started yesterday, today the topic is the interrelated themes of credit cards and identity theft.

It has been quite a year for credit cards. How bad, and just how flat out weird, things had gotten was made apparent back in February, when I posted about American Express paying a bounty of $300 to certain customers to just go Credit-cards Lotus Head away and stop being customers. As I said at the time, this can’t possibly make big-picture business sense, although it might have been a plausible reaction to some perverse incentives from Wall Street.

Sadly, my scheme to seek out other companies that might pay me not to do business with them failed miserably.

By June things had gotten even worse for credit card companies. Or maybe the mainstream media just discovered how bad it was and started reporting on it. The Times had a story about how card companies had done everything but start printing "or best offer" after your balance on the monthly bill. I had a post on that, which also pointed out that everybody hated the companies anyway.

Which segues nicely into the CARD Act, the government’s sweeping reform of all that was bad about credit cards, making America’s malls once again safe for wholesome and law-abiding citizens. (Am I the only one who resents tax dollars being spent on the salaries of government employees who come up with acronyms like CARD?)

I had more sense than to challenge the core reforms of the new law, but I did write a nice little piece on one of the goofier aspects of it, the prohibition against giving cards to those under 21. I gather I am in the minority in thinking this is goofy.

Of course, cards (credit, debit, and charge) are one of the few topics about which I am content to admit that I am not merely out of step with the rest of the country, I am actually clueless. Every month the wife and I charge stuff. Lots of stuff. Then I send the card company a check (yes, an actual paper one in an envelope) for the amount that we charged. This has been going on for 20+ years now. Apparently, this experience is unique to us.

I first admitted being mystified about how Americans use plastic in September, when I discovered that debit transactions now outnumber credit ones. Four months later and I am still scratching my head on that one.

A little while after that I took up the cause of plastic over cash. Even an old guy like me who hoards incandescent bulbs and cannot imagine why he should ever be on FaceBook can see that paper money and coins don’t have a future.

My confusion mounted earlier this month when I realized that not only do people prefer not to have the option of borrowing, i.e. credit, but Amex has a new card and ad campaign based on the premise that they will actually pay more for a card that is less flexible and forces you to pay in full each month.

In November, I had owned up to even more befuddlement when I found out that Real Americans write "check ID" where their signatures are supposed to go on the back of their cards. Huh? I find store clerks that ask for ID to be one of the more infuriating recent retail developments. People actually request this treatment? Really? Seriously, I don’t get it.

To be fair, I further revealed my ignorance in that post by stating that I thought that stores were not allowed by Visa/MC to ask for ID. A commenter enlightened me on this. They are allowed to ask for ID, they are merely not allowed to do anything about it if you refuse. This clarification did not decrease my confusion by as much as you might think.

Of course, this brings us to the magic fairy land of identity theft, where goblins attempt to learn the secret true names of the good creatures of the realm in order to cast evil spells upon them.

I stumbled on this mother load of money related nuttiness more or less by accident. One day in June I needed something to write about and came across a recent court case that had been lost by an absurdly profitable company with a big ad budget called LifeLock. I thought that might be worth a quick post so I punched out a few ‘graphs. Next thing I know, the post is being called "biased, poorly researched, and full of holes" by "an Id theft educator and recognized expert". Awesome!

Clearly, I needed to know more about this fascinating topic, so I attempted to find some hard numbers about ID theft. Although I did confirm that figures cited by LifeLock in its advertising are basically fiction, I failed miserably otherwise. Depending on which government agency you ask and how you define your terms, ID theft is either the most common crime in America or hardly ever happens.

When you get down to it, we know very little about ID theft. Which just makes it more scary. Kinda like global warming.

But people like reading scary stories. Which brings me to the last post in this review, and one of my favorites for 2009, How to Guess a Social Security Number and Get Famous on the Internet. It’s about a pair of professors who write a clever paper on how it is surprisingly easy to guess a person’s social security number under certain circumstances. (For example, if the person is a pre-teen from Alaska.) It adds further evidence, as if we needed it, that knowledge of a SSN is not an adequate proof of identity. Everybody seems to know this, but nobody seems interested in doing anything about it. More fun to be scared.

Tomorrow, theme #3: we’re all idiots.

[Photo: Lotus Head]

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