Another Credit Card Call…

This time another of my credit card banks calling to let me know that they’d be sending out a free credit report to me to check for anything untoward, and, by the way, they would simply love to help monitor my account for signs of identity theft and credit card fraud, completely free. For the whole first month.

Well, I scorched the guy’s ears a little, accused him of aiding and abetting in a scam, and he told me that I just didn’t understand. And that’s about where we left it.

In his own words, he said that ten million people have become victims of identity theft. If all the credit card companies are doing about this is coming up with ways to milk the consumers for more money, that number is going to get a lot larger in a hurry. Asking consumers to voluntarily buy into a program that offers no guarantees that anything of value will be gained is no answer to the bigger picture. Maybe I’m completely off-base and there is no threat to consumer credit, but ten million victims sure hints that this is a job that needs cooperation and coordination at very high levels, not telemarketing scare tactics aimed at terrorizing individual consumers.

I checked my credit card bank’s web page, and the company that actually is providing the service being offered is an outfit called Intersections, Inc. Now, I’m sure that Intersections is all above-board and simply out to make a profit in a completely legitimate way. At least, I have no evidence to the contrary. What I am upset about is my card issuer’s apparent use of the “service” provided in lieu of actual action to guard their customers against identity theft. That, and the probable cut that they get by providing customer data for the contact.

OK, I just spoke with a customer service person at Intersections, and here’s the deal. For the premium services, they send notices to the consumer of current activity on their account, up to daily notices. It is still up to the consumer to pay attention to these notices and figure out if something untoward is happening. Eventually, this becomes a $12.99/month bill. Something I didn’t think to ask, but seems implicit in the way this is run, is that that is $12.99/month/account. If you’ve got more than one credit card and you want that service, you’ll be paying $155.88/year/account. But maybe this works off of overall credit reporting and not just what’s happening on one account. That would be good news, but I’m not counting on that being right. The whole “service” aspect of this appears to involve the bare minimum of work at Intersections to deliver a few numbers to people, with no kind of analysis happening there at all. I know that this is not the impression given during the pitches I’ve received from the telemarketing crew, who make it sound like a bunch of dedicated people are paying attention to my data to make sure that I don’t get swindled. That’s not the drill. A bunch of computers do some daily database lookups and a few queries go out to credit reporting services per subscriber, and maybe a notice gets sent to a consumer if there is activity on the account. And that’s it. The customer service person said that they have 3.5 million subscribers currently. So, take the $155.88/year figure, multiply by 3.5 million, and… whew… I come up with $545 million dollars per year gross intake. By their annual report for 2004, they listed $152 million in revenue. So either there’s a mixup on the numbers I was given, or Intersections is growing by about 3 times what they were doing in 2004.

According to that same annual report, there have been 36 million victims of identity theft over the past five years, resulting in some $50 billion dollars of losses. I’m not sure what the real answer to the problem is, but I’m confident that it is not simply relying on consumers to fork over $155.88/year on a voluntary basis, and then spend a significant chunk of their time paying attention to pretty much unprocessed data shipped to them as a result.