Online (Non) Privacy

Today's New York Times explains "How Privacy Vanishes Online."  Among other things, the article explains how, by combining information from a variety of sources, someone can correctly "guess" a lot of people's social security numbers:

Even more unnerving to privacy advocates is the work of two researchers from Carnegie Mellon University. In a paper published last year, Alessandro Acquisti and Ralph Gross reported that they could accurately predict the full, nine-digit Social Security numbers for 8.5 percent of the people born in the United States between 1989 and 2003 — nearly five million individuals.

Social Security numbers are prized by identity thieves because they are used both as identifiers and to authenticate banking, credit card and other transactions.

The Carnegie Mellon researchers used publicly available information from many sources, including profiles on social networks, to narrow their search for two pieces of data crucial to identifying people — birthdates and city or state of birth.

That helped them figure out the first three digits of each Social Security number, which the government had assigned by location. The remaining six digits had been assigned through methods the government didn’t disclose, although they were related to when the person applied for the number. The researchers used projections about those applications as well as other public data, like the Social Security numbers of dead people, and then ran repeated cycles of statistical correlation and inference to partly re-engineer the government’s number-assignment system.

Federal Courts' More Constructive Response to RECAP?

by Paul Alan Levy

Last year I expressed concern in this space that the federal courts seemed to be responding to the RECAP the Law project -- which is designed to build up a database of federal court records that would be available free of charge -- by using scare tactics to discourage participation.  Now comes the news that the Judicial Conference has approved changes that could make federal court records more readily available for free to occasional users.  Under the changes, users can get $10 worth of downloads for free every quarter (rather than $10 per year), and audio recordings of court hearings will be available for $2.40 rather than the current $26.

Journal of Consumer Affairs Spring 2010 Issue Available

Here.  From the Table of Contents:

Are Consumers Disadvantaged or Vulnerable? An Examination of Consumer Complaints to the Better Business Bureau (p 3-23)
DENNIS E. GARRETT, PETER G. TOUMANOFF

The Effects of Advertising, Social Influences, and Self-Efficacy on Adolescent Tobacco Use and Alcohol Consumption (p 24-43)
BRIAN R. KINARD, CYNTHIA WEBSTER

Credit Counseling to Help Debtors Regain Footing (p 44-69)
JEFF JIANFENG WANG

Which Households Think They Save? (p 70-97)
YOONKYUNG YUH, SHERMAN D. HANNA

More Than a Penny Saved: Long-Term Changes in Behavior Among Savings Program Participants (p 98-126)
CÄZILIA LOIBL, MICHAL GRINSTEIN-WEISS, MIN ZHAN, BETH RED BIRD

Examining the Effect of Expressing a Quantitative Goal on Consumer Savings (p 127-154)
CÄZILIA LOIBL, ROBERT L. SCHARFF

Concern with Immediate Consequences Magnifies the Impact of Compulsive Buying Tendencies on College Students' Credit Card Debt (p 155-178)

Consumer Biases and Competences in Company Stock Holdings (p 179-212)
CHRISTINE W. LAI, JING JIAN XIAO

Cohort Effects of Household Expenditures on Food Away from Home (p 213-233)
HUA ZAN, JESSIE X. FAN

Colston E. Warne Lecture: Is It Time for Another Round of Consumer Protection? The Lessons of Twentieth-Century U.S. History (p 234-246)
LIZABETH COHEN

ACCI Memorial Paper: The Scholarly Legacy of E. Scott Maynes (p 247-258)
LOREN V. GEISTFELD

Interaction of Law and Ethics in Matters of Advertisers' Responsibility for Protecting Consumers (p 259-264)
IVAN L. PRESTON

Is the Obama Administration More Open Than Its Predecessor?

On his first full day in office, President Obama issued a memorandum on the Freedom of Information Act (FOIA). He quoted Justice Louis Brandeis's famous line that "sunlight is said to be the best of disinfectants" and directed federal agencies to "adopt a presumption in favor of disclosure." A couple months later, Attorney General Holder followed suit and "strongly encourage[d] agencies to make discretionary disclosures of information." "An agency," he said, "should not withhold records merely because it can demonstrate, as a technical matter, that the records fall within the scope of a FOIA exemption."

Has this new attitude made a difference so far? According to a review conducted by the Associated Press, the answer is no. The AP reviewed FOIA reports "filed by 17 major agencies [and] found that the use of nearly every one of the law's nine exemptions to withhold information from the public rose in fiscal year 2009, which ended last October." The AP Report is consistent with a another new report from the National Security Archive showing that most federal agencies have not implemented the Obama and Holder memoranda.

Two things worth noting: First, President Obama was in office for only nine months of the period studied by the AP, and it may take time for the new policies to take effect within the massive federal bureaucracy. Second, there are indicia of open government other than how agencies respond to FOIA requests, such as how much information agencies disclose on their own on websites and elsewhere. But the early returns are not good. The Obama Administration needs to step it up on transparency.

A Year and a Half After the Economy Crashes, and This Is What We Get?

by Robert Weissman

 A year and a half after the collapse of Lehman Brothers and Wall Street's subsequent implosion - and amidst the worst recession of the last 70 years - Congress has failed to adopt a financial reform package to rein in Wall Street and prevent a recurrence of the crisis. 

There is a single overriding reason for this state of affairs: Wall Street and the big banks continue to exert overwhelming and improper influence over the policymaking process.

That is one reason why breaking up the big banks is arguably the most important reform needed. We need to break up concentrations of financial power to rescue our democracy, diminish excessive risk-taking by large institutions that expect to be bailed out in case of failure, improve service for consumers and communities, and preserve financial stability.

Unfortunately, the new Senate proposal, like the already approved House bill, fails to meet this challenge.

Senate banking committee Chair Christopher Dodd’s new draft financial reform bill is the product of a drawn-out and apparently still ongoing negotiation. The bill is long and complicated, and it will take some time to digest all of its provisions. It contains some important positive reforms but also some gaps and areas of concern. 

On the contentious issue of the Consumer Financial Protection Agency -- downgraded to a Bureau of Consumer Financial Protection in the Dodd bill -- the story is mixed. Rather than being created as a standalone agency, the bureau is lodged at the Federal Reserve, an agency that utterly failed to exercise its consumer protection duties during the run-up to the financial crash. On the positive side for consumers, it does appear that the bill gives the bureau substantial autonomy, as well as rulemaking and enforcement power. Had a strong agency been in place at the turn of the century, the worst lending abuses that followed would have been avoided, and the financial crisis would have been noticeably less severe. 

The bill also gives the bureau authority to prohibit the practice of forced arbitration, in which companies force consumers to resolve disputes before private, secretive, company-chosen tribunals instead of public courts.

"Did a Lack of Consumer Protection Cause the Financial Crisis?"

Tomorrow at noon, the Cato Institute's Policy Forum will host what promises to be an interesting and lively  debate over that question, featuring Janis Bowdler, National Council of La Raza; Thomas Durkin, Former Economist, Federal Reserve Board; Ed Mierzwinski, U.S. PIRG; and Todd Zywicki, George Mason University School of Law. Moderated by Mark A. Calabria, Director, Financial Regulation Studies, Cato Institute.

Here's Cato's official description, which uses the term "consumer protection" in scare quotes:

There is likely no issue more contentious in the debate over the causes of the recent financial crisis and the appropriate response other than "consumer protection." The question of whether credit was too cheap or too expensive (or predatory) is at the heart of the differing narratives of the crisis. Panelists will examine these opposing narratives and debate the merits and substance of proposed consumer protections in our financial markets, including the creation of a Consumer Finance Product Agency.

If you can't make it over to Cato's Dupont Circle headquarters, you can watch it live online.

Dodd Financial Regulation Bill Under Scrutiny from Senate Democrats

Over at PIRG's Consumer Blog, Ed Mierzwinski says that Senator "Dodd['s] Wall Street plan leans toward banks, not [the] American people." He notes that Senators such as Bernie Sanders, Sherrod Brown, and Tom Kaufman may vote "no" if the bill lacks an independent Consumer Financial Protection Agency and tough new bank regulation.

Apparently, Citizens United doesn't believe in free speech for the anti-corporate side

by Paul Alan Levy

Citizens United, fresh from its Supreme Court victory giving corporations the right to bankroll election campaigns, has sent a trademark demand letter to the Wisconsin Democracy Campaign, complaining that a Facebook page entitled "Citizens United Against Citizens United" infringes its trademark.  Apparently, Citizens United is worried that members of the public might come to the page and think that the organization "Citizens United" is attacking Citizens United, the landmark Supreme Court decision that it won. 

Although we haven't seen this issue litigated in the context of Facebook, Citizens United's demand flies in the face of the many decisions holding that an Internet gripe site (or fan site) may use the trademark of the subject of the discussion as its domain name. Under Lamparello v. Falwell, 420 F.3d 309 (4th Cir. 2005), that's even the rule in the Fourth Circuit, where Citizens United is located.  How can they possibly hope to win a case like that? 

Wisconsin Democracy Campaign's argument would seem to be even stronger, because it is using "Citizens United" in its descriptive sense, and not as a mark. It seems doubtful that Citizens United the conservative group can prevent a group of citizens who are united to support or oppose a particular proposition from referring to their effort as Citizens United For X or  Citizens United Against Y. (Otherwise, many groups that would have to change their names). It is especially hard to understand how any confusion about source could be expected to result from labeling a campaign "Citizens United Against Citizens United."

Interestingly, Citizens United asks Wisconsin Democracy Campaign to destroy all documents bearing the Citizens United trademark.  If that demand were extended to the Supreme Court, could it succeed in wiping the Citizens United decision off the books?

The Importance of CFPA Independence

In the Capitol Hill publication, The Hill. 

Senator Dodd's Bill

 The full text of the financial services reform bill introduced by Senator Dodd today, which includes a new Bureau of Consumer Financial Protection within the Federal Reserve, is available here.

At his press conference Senator Dodd seemed to emphasize that the Bureau will be independent of the Fed with a presidentially-appointed director and separate budget.