Contrast these three situations, Cringely suggests:
- you are sitting in a hotel bar in Mongolia and want to use your Visa card to buy a round of drinks for your friends, and;
- your Mom is at the check-out counter at a Sears store when the clerk asks her if she wants to apply for a Sears credit card and save 10 percent on her order, and
- a possible terrorist with a dubious travel record and suspected al-Qaeda connections is standing in line at a European airport waiting to board a flight to the U.S. that leaves in an hour.
What happens in each of these cases?
In Mongolia the bartender takes your card and authorizes it in seconds across a 12,000-mile round-trip. At the Sears store the transaction is not only authorized in less than a minute, but a new account is created and both your Mom’s identity and her creditworthiness are established and calculated on the spot, along with her discount. Meanwhile the airline, airport, local security, European police, Interpol, Transportation Security Administration, Department of Homeland Security, Customs Service, FBI, CIA, and NSA can’t between them figure out in an hour whether this guy standing in line in Holland should be allowed on the plane or not.
Cringely has previously noted how the U. S. Government has no idea how many illegal aliens there are in America, but the big credit reporting agencies know exactly how many:
The credit reporting agencies have a handle on total numbers and have a lot of information on specific individuals. So members of the gray economy are, for the most part, not invisible at all, just difficult to identify as individuals. But thanks to data mining down at the credit bureau, it is getting harder and harder to hide.A lot of this sleuthing comes down to a surprising artifact, the Social Security number. One would think that surprising for an economic class of people best known for not having Social Security numbers. Ah, but they do have Social Security numbers, just not their own. You need a Social Security number to sign up for utility services, for example. No Social Security number, no electricity, gas, phone, or satellite TV. So what’s a poor alien to do? They go down to some local hangout and buy a Social Security number to give to the utility. This has to be a legitimate number or it won’t fly with utility computer systems, but does it have to be the customer’s own number? Good question.
Here’s where we have an interesting business ethics issue. Say you are the electric company and someone tries to set up service using a Social Security number that already exists in your database and is clearly borrowed, bought, or stolen. What do you do? Most utilities go ahead and set up the account, because to them what counts is whether the new customer will actually pay that bill and it turns out that people operating on such borrowed numbers are more reliable bill payers than the rest of us. They can’t afford to get in trouble with the electric company because that would draw attention to them. So there is a tacit agreement between the parties that a Social Security number must be provided because that’s the rule, but if it happens to be someone else’s Social Security number, well that’s okay.
The funny thing about this is the impact it has to have on the person who was originally assigned that Social Security number by the U. S. government. Rather than hurt their credit it actually helps because there is so much evidence that they are good at paying their bills!
Of course the credit bureau notices something and that’s why they are so able to estimate numbers in the first place. They know what Social Security numbers are being overused and can probably even trace the genealogy of that number as it makes its way across the country. Here’s an amazing fact: some individual Social Security numbers are in use right now by up to 3,000 people and it isn’t at all unusual for a borrowed number to be used by 200–1,000 people at the same time.
Cringely got a phone call about this from the U. S. Department of Homeland Security:
“The credit bureaus can really do that?” Mr. Homeland Security asked. “Do they really have that kind of data? Who can tell us more about this?”I am not making this up.
That was in 2007 — six years after 9/11 and the people who had already spent billions of dollars making us safer by gathering information had no idea at all what kind of information was already being gathered.
I don’t know what happened after that but I can make a good guess. My guess is that the folks at Homeland Security if they actually bothered to follow-up on the contacts I gave them probably decided they needed to spend more billions and build a similar information system for their own use — yet another fiefdom — and that system will be operational sometime this decade.
Cringely’s “better” idea? Outsource the whole screening process to the credit agencies. What’s the worst that could happen?