In the previous issue, we took a look at identity theft.|
I'll continue in this issue with my acidic
observations and blunt remarks. I also need to address a particular
issue upfront, on the topic of personal security. The vast majority of
loss in this area comes from two sources: legal government actions and
illegal actions of government employees. To ignore these while writing
on the topic is simply irresponsible. Nothing I say here is from any of
the "conspiracy theory" hoopla. One of my key sources is the Government
Office of Accountability. What they find in their audits of government
agencies is stunning.
In our previous issue, I discussed how AT
(American Taliban) employees and other crooks conduct identity theft. We are all required to
provide some very personal information to the AT, and the only real
safeguard in place is the fact there are so many of us to rob.
employees simply can't get to all of us--millions enjoy the protection
of the crowd. This is similar to how a gazelle might escape being eaten
by a lion simply because there are so many gazelles around. That's not a
very secure system of protection now, is it?
Prevalence of Identity Theft
also provide information to banks, hospitals, and universities--all of
which have had some famous data security breaches in the past few years.
The problem is not that the crackers (the pejorative term for a rogue
hacker) are so good. It's that people who work in these institutions are
careless. Most of them simply don't follow established procedures--which
they don't understand or appreciate. Because of this laxity (brought
about by ignorance), identity theft is common.
In a way, it's a good thing. That's because it creates market
competition against which AT employees don't like to compete. But I am
splitting hairs with this observation. If you're being robbed, you're
A full 37% of the fraud complaints received by the Federal Trade
Commission (FTC) in 2005 were due to identity theft.
That same year, Javelin Research conducted a study and said the total
loss to consumers and businesses was $52.6 billion. That's a rounding
error compared to the amount of money stolen and pi--ed away by the
federal government. It's nearly zero, compared to what its unaccountable rogue employees steal in the
various scams they run. But again, if you're being robbed, you're being
And, unlike theft conducted legally by the
government or illegally by its employees who can laugh at the laws that
the rest of us must follow, identity theft does bring with it some
Good news and better news
The good news on the identity theft front is there's actually a
downward trend in the number of victims and the average time to resolve
the case. Of course, the "always get it wrong" newspapers and the
"distort what you report" television folks give us the opposite
impression. If you actually listen to those propagandists, please
contact me immediately about a great deal on beach front property in
Now, the even better news is this. The Javelin study revealed that
only about 10% of identity theft occurred online. That is, 90% of all
identity theft is conducted offline. That's right--the major media have
the story 100% backwards. Which is not at all unusual for them.
One reason for this difference is we have
things like secure Web browsers. Another reason is the typical person
who conducts transactions online is much savvier than the typical person
who does not. So, the crooks have harder targets to go after. Another
reason is most crooks are pretty stupid. It's easier for them to bribe a
government official (who also tends to be pretty stupid) or just watch for a bank employee to commit a
security violation than it is for them to hack into a secure system.
About 1,000 times harder (that's an actual number, not a guess).
Despite the hoopla from the "mainstream" (read,
special-interest driven) media, most
people become fraud victims offline vs. offline, and the ratio is about
10 to 1. Think about those odds for a moment.
Even more revealing: People who detected identity theft via their
paper statements suffered an average loss of $4,543. But those who
monitored their accounts online suffered an average loss of only $451.
Once again, 10 to 1 superiority for the online person. The total losses
in the paper world are about 100 times the total losses in the online
This difference between reality and "mainstream media" reporting is
another reason to avoid contaminating your brain with television or
newspaper "news coverage."
When there's identity theft, you have to overcome brainless
bureaucracy to correct your credit report. Doing so can take years. One
reason why you will be in the mess for so long is--you guessed it--the
In 2003, this band of criminal brothers passed yet another law that is named for the
opposite of what it accomplishes. I don't know if CONgress has ever, in
the past 100 years, passed any
laws that do what they purport to do. But CONgress, like any two-bit
hustler, sure puts the spin on
things. They have, consequently, given the false impression to many
naive people that they actually care about
Lest you think that I'm just an anti-government
person spewing some kind of new age sentiment, I am in the company of
such folks as Mark Twain--who said, "Suppose you were an idiot, and
suppose you were a member of Congress. But I repeat myself." And that
was back in 1890 or thereabouts. I'm actually very much for
government. But one that follows laws and serves the people. That's not
what we have.
Shafted by FACTA
Back to this 2003 law. This particular attack on
ordinary citizens is called the Fair and Accurate Credit Transactions Act (FACTA).
If you're a consumer, you can call it SHAFTA, because this law basically
gives you the shaft. You can come up with your own thing those letters
The law allows consumers access to their credit reports, but only on
an annual basis. Huh? Like most federal laws that purport to be good for
you, it contains an aspect that works harshly against you. This law bars
states from enacting stronger consumer protection laws.
requires you to go through the mill of talking to clueless cops so you
can get a police report on file before you can get a long-term fraud
alert put on your credit account. The cops are clueless because they are
rendered that way by the system. An investigation into this kind of
crime is way, way, way outside the scope of their training and
expertise. CONgress doesn't care. They see no problem in adding yet
another burden to our already overburdened (and underpaid) police
Just for the record, the senate isn't so swift
either. Criminal advocate Senator Charles Schumer wanted to ban police
officers from carrying firearms when off-duty and to ban retired cops
from having firearms at any time. This is the kind of stupidity that
passes for "legislative deliberation." The only thing deliberate about
it is the shafting of ordinary American citizens.
Ask your CONgressman if s/he voted for this blatantly pro-crime act
If so, always vote for your CONgressman's opponent until that bum is out
But most likely, your CONgressman or his/her staff will
claim to have fought this bill. Don't believe what they tell you. Do some
research online and find out whether your CONgressman is a criminal
activities champion or not.
By the way, my CONgressman opposes the Fair Tax. Not coincidentally,
he has also lobbied
heavily for better working conditions for violent criminals and for
mandatory wage cuts for every member of the middle class. Now, you may
wonder why the heck he would do such harmful things. First, you have to
understand that kind of anti-citizen behavior is the rule, not the
exception, in terms of "representation" we get from CONgress.
Why this mess?
reason CONgressmen consistently undermine the middle class
voter/taxpayer. They figure if they create a situation in
which citizens are struggling to hang on, then we won't have the time or
resources to demand some minimal level of performance from CONgress.
"Create a crisis" is their modus operandi.
While we are busy coping with the mess they created for us, they
smile as they enjoy their $180,000 a year jobs
(with automatic annual wage increases) and enormous benefits. In
addition to the high salary, they don't have to pay SS tax on it and
they have their own pension system funded at your expense. So that
really translates into something north of a quarter million dollars a
year. This person allegedly represents you. If you make around a quarter
million a year, then that may be true.
You might expect me to say, "I'm not saying everyone in Congress is a
crook." Don't hold your breath, waiting for me to say that. The
level of thievery is staggering to even contemplate.
I'm not saying "our" federal government is totally useless.
"Totally useless" would be an improvement.
Am I expecting too much from government? To answer
that, just compare the track record of its (super costly) programs vs. the
track records of organizations like the United Way or Red Cross.
like night and day. I've seen the report cards of these large charitable
organizations. They obsess over getting a return on the dollar donated
to them. I think for the 10 largest such organizations, the number is
something like $1.40 in services for every $1 donated. The federal
government, on the other hand, costs more than it returns.
Give the federal government a dollar, and they'll flush
$1.25 of it down the toilet. Which is why we all pay between 76% and 86% of
our income in taxes (when you add up all the taxes, that's the amount it
turns out to be) yet still have a multi-trillion dollar federal deficit.
But give a dollar to the aforementioned organizations
or their peers, and they return $5 worth of services (maybe not to you
personally, but....). Something to think about.
People give willingly to support these effective
organizations. But the government has to resort to forced extraction.
This, alone should be instructive. Rather than create a federal income
tax collection body that is larger than our combined Army, Navy, Air
Force, and Marines, the government should start providing value for the
dollars it collects.
Putting salt into this wound: The government provides only laughable controls to
protect your privacy or confidential information. These other
organizations actually care about the people who support them.
What to do
Back to identity theft. Getting rid of this pestilence known as the AT may take a while. In
the meantime, look at other sources of criminal activity and identity
theft. Get a free credit report (look online for credit reporting
agencies and contact one). Then, look it over carefully. Thanks to CONgress, you have a whole year to do this before you can get an updated
If you find problems, start tracking them down one at a time. It's
better to get that long, drawn-out process started now than to find out
when you need to refinance your home or pay for a medical emergency that
you can't get credit.
There are some third-party services that can help you protect
yourself. But your best bet is to keep reading this newsletter and to go
through the back issues and then heed the advice given. I've written
extensively on how to protect your information from everybody but the
AT. Until we pressure legislators to abolish the AT, that huge security
hole will remain for everyone. To help close it, contact
Finally, shop at sites like Mindconnection. We use
128-bit security encryption, so whatever you enter into your browser is
safe. The US Navy tried to break a 64-bit encrypted message using a Cray
supercomputer and gave up after six months. 128-bit isn't "twice" as
secure. It's something like 10 to the 64th power more secure. Look also
for the Hacker Safe symbol, decent Web design, content written in
grammatically correct English, and so on.