I keep meaning to write more about identity theft. It combines several of my favorite themes, including the triumph of compelling narratives over actual facts, cloddish government bureaucracy, and, of course, bad money advice. 
Also, when I write about it I tend to annoy certain people that I enjoy annoying.
Yesterday the FTC and 35 state attorneys general announced a settlement with one of the major players in the ID theft business, LifeLock, in which the company agreed to pay $12M and stop its hitherto deceptive advertising.
I am willing to admit that when I entitled a post The Death of LifeLock last June I jumped the gun a little. Still, the outlook for the company continues to deteriorate. Yes, for a company of its size, a back-of-the-envelope has annual revenue at $180M, forking over $12M is not the end of the world. But it’s a noticeable hit. And the restrictions on advertizing may just be the beginning of the end.
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Yesterday the US Postal Service put out a press release Postal Service Outlines 10-Year Plan to Address Declining Revenue, Volume: Seeks Flexibility on Operations, Delivery; Possible 2011 Price Increase.
For fans of the good old USPS (there must be a few out there) it is grim reading. Mail volume is projected to decrease from 177 billion items in 2009 to just 150 billion by 2020. On its present course, the USPS is projected to lose a total of $238 billion over the next decade, a number that makes the shortfalls in Detroit seem relatively manageable.
The AP story on this was headlined Postal Service’s emerging model: Never on Saturday. The media seems to believe that delivery six days a week is a hot button of some kind. Personally, I don’t care very much. Deliver my mail three days a week if you like. Last year Gallup found 66% of Americans favor dropping Saturday to save money.
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Saturday’s Wall Street Journal carried a column by Jason Zweig, Brokers Win, Investors Lose Key Reform which lamented the loss of a provision in a bill now "oozing" through the Senate that would have made stockbrokers, insurance agents, and certain other financial salesmen into fiduciaries.
On the remote chance that the term fiduciary does not ring any bells, let me explain. Investment advisors and managers, including, for example, mutual fund companies, are fiduciaries. They are required to put their clients’ interests first, which basically means watching over client money as they would their own. Of course, there are limits to this, nobody would expect a mutual fund company to lower fees out of fiduciary responsibility, but by and large this works and consumers get what they expect from the relationship.
At the opposite end of the trust spectrum are ordinary salesmen and the ordinary profit-maximizing companies for which they work. Of course, the great majority of people and firms we do business with fall into this category. We know this and think nothing of it. When the waiter suggests dessert, nobody indignantly objects he is not putting the interests of the diners ahead of that of his employer. Ditto for the salesgirl at the mall who says you look great in those pants. Again, this system works and consumers get what they expect.
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This is the third installment in what has turned out to be a series of posts about the CARD Act of 2009 and the Federal Reserve’s new regulations to implement same. Last week I discussed how new rules requiring lenders to 
consider ability to pay were a non-event. And on Monday I explained that there were not, after all, meaningful restrictions against giving cards to those under 21.
Today I will round up some other don’t-know-if-I-should-laugh-or-cry oddities that I came across in my few hours of research. As good a place to start as any is the other prong in the attack on underage plastic, new draconian restrictions against marketing these evil things to college students.
Section 304 of the CARD Act reads, in part:
No card issuer or creditor may offer to a student at an institution of higher education any tangible item to induce such student to apply for or participate in an open end consumer credit plan offered by such card issuer or creditor, if such offer is made—
(A) on the campus of an institution of higher education;
(B) near the campus of an institution of higher education,
as determined by rule of the Board; or
(C) at an event sponsored by or related to an institution
of higher education.
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A little while back the Wall Street Journal ran a pair of articles about things we should do in preparation for the inevitable effects of the federal budget deficit. Brett Arends led off on February 4 with The Deficit: How to Protect Yourself and then on the 6th we got a round up of advice from most of the rest of the WSJ staff in Protecting Yourself from the Giant New Deficit: How to Keep the Scary U.S. Debt From Eating Up Your Assets.
To a degree, items like these almost comically miss the big picture. They remind me of pieces popular a while back that said that in anticipation of global warming we should all buy land in the Canadian interior. If the government continues on its present course, and I for one am not ready to concede that that is a certainty, it will be an economic calamity that will make us all drastically worse off. The best thing a person can do about the deficit is to vote for leaders willing to do the ugly and unpopular things necessary to reduce it.
But if you can ignore the big picture and focus on only the near term effects of the current and upcoming deficits, it is possible to come up with some coherent advice. Not that the crew at the WSJ consistently do this.
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Also, when I write about it I tend to annoy certain people that I enjoy annoying.
Government, Identity Theft | Frank Curmudgeon | 
March 10, 2010 12:59 pm | 
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