What we call "privacy" is just an unclosed loophole

I really liked Glenn Reynolds' latest InstaVision interview:

I talk with Jim Meigs of Popular Mechanics, who explains the creepy side of the information age. Corporations compile information on you. Can this information be used for nefarious purposes? What happens if a stalker gets a hold of your information?
I like to think that at age 56, I'm a bit old to attract stalkers, but I would love to at least have the ability to make it harder for whoever these people are to invade my privacy.

While it is annoying for corporations to be gathering all of this information on every last thing we buy and every movement we make, it didn't take long for an obvious thought to cross my mind. Surely, a lot of people are annoyed by the constant encroachments on their privacy, and would be willing to pay in order to "opt out." Starting with credit cards. Suppose you don't want a record of all your purchases to be public information. There's always paying with cash, right? But suppose you don't want to lug cash around all the time.

And what about the growing trend of businesses that refuse to accept cash?

Think I'm kidding? Try to buy something as mundane as an iPad. Apple stores will not accept cash:

Being disabled and on a fixed income, Campbell held off on buying a computer until the Apple iPad came along. It was small, mobile and perfect for her needs. So, little by little she saved up the $600 she needed to get one.

"It took quite a long time for me to just save up this small amount of money to go down and purchase one," she said. "I had my cash in the backpack and I went up proudly to the counter and told them, 'I would like to purchase an iPad.'"

She was at the Apple store in Palo Alto, about to pull out the big wad of cash and take home her first computer. Instead, she received a terrible blow.

"They said, 'Sorry, we don't take cash.' And, so I looked at her and I said OK she's kidding," Campbell recalled.

However, the clerk was not kidding. The Apple sales policy says if you want an iPad, you must pay by credit card or debit card. Diane didn't have any plastic and amazingly her cash was useless.

"It's sort of astounding to think here is this U.S. dollar, this money put out by the U.S. Treasury Department, and it's being turned away," Alan Fisher says.

Fisher, of California Reinvestment Coalition, advocates for low-income consumers who have trouble getting credit or mortgages.

"Apple is coming at this in a very heavy-handed way, and it means that their nice products are not being able to be enjoyed by people who already have many difficulties accessing the rest of mainstream society," he says.

Well, screw Apple then. I consider their policy to be un-American as well as Orwellian. I consider paying with cash whenever I want for whatever I want to be as American as apple pie. No Apple for me! If this is a sign of the times, then we are living in times that suck, and I can think of no better argument against keeping up with the times than boycotting this asshole company.

In fairness to Apple, I should point out that their policy generated such an angry backlash that Apple was forced to reverse its no-cash policy. For now....

I hope this does not represent a growing trend, because cash is one of the few vestiges of privacy remaining in this once free country. However, a major problem with cash is that a lot of people don't like carrying large sums cash around. In a comment yesterday, I opined that while there is "an absolute right to walk down the street with hundreds of thousands of dollars in your pocket," that it "might be stupid" because of the risk of robbery. I now realize that I spoke in haste, because if you had hundreds of thousands of dollars on your person, you might have just as much to fear from the police as from a criminal. Police love to take money away from citizens, and they so so at every opportunity. Naturally, our fearless courts uphold them when they do. Driving with large amounts of cash has been held to be a crime:

Federal Appeals Court: Driving With Money is a Crime

Eighth Circuit Appeals Court ruling says police may seize cash from motorists even in the absence of any evidence that a crime has been committed.

A federal appeals court ruled yesterday that if a motorist is carrying large sums of money, it is automatically subject to confiscation. In the case entitled, "United States of America v. $124,700 in U.S. Currency," the U.S. Court of Appeals for the Eighth Circuit took that amount of cash away from Emiliano Gomez Gonzolez, a man with a "lack of significant criminal history" neither accused nor convicted of any crime.

On May 28, 2003, a Nebraska state trooper signaled Gonzolez to pull over his rented Ford Taurus on Interstate 80. The trooper intended to issue a speeding ticket, but noticed the Gonzolez's name was not on the rental contract. The trooper then proceeded to question Gonzolez -- who did not speak English well -- and search the car. The trooper found a cooler containing $124,700 in cash, which he confiscated. A trained drug sniffing dog barked at the rental car and the cash. For the police, this was all the evidence needed to establish a drug crime that allows the force to keep the seized money.

No drugs were ever found. So all they need to do is have a dog bark at you. I get barked at all the time, because not only do I have an attitude of insolent familiarity with dogs, but I smell like Coco, who has been favorably compared with Audrey Hepburn and Kim Novak. That's enough to drive most red-blooded American drug sniffers crazy. They might even want to mount me. So I better not exercise my right to keep and bear large sums of cash that the courts say I no longer have.

There are numerous reports involving government shakedowns of people carrying cash. Even a Ron Paul staffer was grabbed at an airport and detained by the TSA. His "crime"? Merely having $4700 in cash. Bastards.

But my ranting does not solve the privacy problem. Carrying cash is problematic even if the government doesn't take it away from you.

So my thoughts turned to plastic. It seems that there ought to be a way to simply buy a prepaid debit card, and then use that in place of cash. I mean, this is free market America, right? Where there is a demand for something (and surely there is a demand for financial privacy), clever entrepreneurs ought to be competing with each other to offer such privacy services.

I looked and looked, and while I found sites like this which discuss the options, I learned about a huge stumbling block. Guess what? It's not big business.

It's the government.

Unfortunately, the federal government recently passed a law that requires all credit card issuers to collect SSNs. This was post-9/11, so I assume the motivation was tracking terrorists' finances. Some go even further; Morgan Beaumont's application form, for example, asks for a copy of your passport or drivers license! No thanks.

Pretty much all issuers have complied, but fortunately, the law only requires that the issuer collect SSNs. Most don't actually do anything with them. Whenever a prepaid card issuer requires me to provide an SSN, I just make one up. Not one of them has complained yet!

Update: Other post-9/11 federal laws, such as the PATRIOT Act, are also rearing their ugly heads. Interpretation is still up in the air, but most financial institutions are erring on the side of collecting more rather than less, and verifying what they collect. For example, Green Dot recently started running credit checks against the SSN and birthdate you give them. No more fake info!

Here's an example disclaimer:

The USA PATRIOT Act is a Federal law that requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. You will be asked to provide your name, address, date of birth, and other information that will allow us to identify you. You may also be asked to provide documentation as proof of identification.


"Sigh" is right. Apparently it used to be possible to buy an anonymous debit card, but they cracked down.

Call it the war on drugs, call it the war on terror. It's really a war on privacy and on freedom, and the government is behind it.

What I can't decide is whether I'm still naive enough to hope that a Republican Congress might do something about it. (Or should we just give up on hope?)

Because pretty soon, all exit routes will be blocked, and the fence will be a done deal.

People will not know they are encircled until it is too late - like putting in all these very deep, robust fence-posts with no fence panels. All seems open. One day you will wake up and the panels are in, you are trapped and they can decide what law they wish to impose to nail whomsoever they desire.
How many warnings do we need?

MORE: Right after publishing this post, I saw a Wired piece titled "Feds Warrantlessly Tracking Americans' Credit Cards in Real Time"

Federal law enforcement agencies have been tracking Americans in real-time using credit cards, loyalty cards and travel reservations without getting a court order, a new document released under a government sunshine request shows.

The document, obtained by security researcher Christopher Soghoian, explains how so-called "Hotwatch" orders allow for real-time tracking of individuals in a criminal investigation via credit card companies, rental car agencies, calling cards, and even grocery store loyalty programs. The revelation sheds a little more light on the Justice Department's increasing power and willingness to surveil Americans with little to no judicial or Congressional oversight.

For credit cards, agents can get real-time information on a person's purchases by writing their own subpoena, followed up by a order from a judge that the surveillance not be disclosed. Agents can also go the traditional route -- going to a judge, proving probable cause and getting a search warrant -- which means the target will eventually be notified they were spied on.

I guess the Fourth Amendment has now gone from being a loophole to being an optional loophole -- depending on the whims of government agents.

It's a disgrace.

Who are these people, and why do they get to spy on us?

As I've said before, in some ways the tyrannical King George was more accountable, for at least his subjects knew who and where he was.... And they were allowed to use cash.

MORE: Regarding debit cards, I did find one loophole which apparently has not been closed -- store gift cards:

Gift cards offer far more anonymity than the prepaid debit cards because they can be used without disclosing any SSN. Although many terms of use say they require online registration of the card if you want to use them to make online purchases, the registration usually asks for a name and an address, not a SSN. Gift cards can be paid for with cash at many locations like Rite Aid, 7 eleven or countless other stores. They also work as an anonymous card at most stores where a regular debit card is accepted, again, without a related bank account.

There are some significant downsides to using gift cards. One of the main ones is that they are usually limited to a maximum of $200. Some vendors will be willing to split the payment over several different cards at once, but some will not be willing to do this so if you want to buy a more expensive item you should verify this before hand. Although not very high for each gift card, the fee for the card can add up if you are buying a lot of them. Gift cards are usually limited for use within the country where it was purchased, meaning that if you want to buy something from another country, you are out of luck.

As to how long the government will allow its subjects to buy them anonymously, who knows?

For now, a clever store chain might consider raising the maximum limit, and marketing them as "privacy cards."

UPDATE: Thanks, Memeorandum for the link!

posted by Eric on 12.03.10 at 10:04 AM


Certain things are unavoidable. I try not to think about them and just keep my exposure to a minimum.
Amazon knows every book I buy or put on my wish list, I'm a little scared because I think books about how to build your own bazooka and homemade explosives are cool.
Not because I want to build a bazooka and blow things up, but because I find it interesting and who knows? If the asteroid really does hit, those would be a good things to know.
As I've said before, there is privacy in numbers. The problem is when some tool decides to screw you.

But you don't need the intertubes for that. My friend just got a new Mustang. A couple of kids in the neighborhood keep messing with it and pointing and laughing at him when they walk by him.
And there's not an effing thing he can do about it.
That infuriates me and it's not my car.

Veeshir   ·  December 3, 2010 2:45 PM

You are crazy if you think a Republican administration will make things better.

This stuff has been going on without the slightest abatement since as long as I can remember, through all different administrations.

The R-leaning citizens hope that an R administration will make things better, so they knuckle under and don't complain. The D-leaning citizens hope that the D administration will make things better so they knuckle under and don't complain. And the one constant is that progressively, every year, the citizens, Ds and the Rs alike, get screwed, and blame each other.

Anyone who blames all this on one party is a tool.

Dude   ·  December 3, 2010 9:26 PM

I must have missed the part where Eric said anything about parties.

Veeshir   ·  December 4, 2010 9:54 AM

If you aren't doing anything wrong, why are you worried about? Which is why for the life of me, I don't understand why everyone has their panties in a bunch over the Wikileaks. Or why cops are so concerned about being videoed while they lawfully execute their duties.

You must have missed this one where the TSA is keeping their eye out for women absconding during divorce

JKB   ·  December 4, 2010 9:59 AM

All U.S. Federal Reserve Notes bear the following notice:

"This note is legal tender for all debts, public and private."

Is this not prima facie evidence that it is illegal to refuse to accept cash? I would go further and require any business or government agency that does so forfeits payment.

Brett   ·  December 5, 2010 11:08 PM

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