From: Marc Horowitz <marc@Athena.MIT.EDU>
Date: Wed, 25 Aug 93 21:32:18 PDT
To: Peter Wayner <pcw@access.digex.net>
Subject: Re: Visa, HNC Inc. develop neural network as a weapon to fight fraud
In-Reply-To: <199308252015.AA24986@access.digex.net>
Message-ID: <9308260427.AA01502@steve-dallas.MIT.EDU>
MIME-Version: 1.0
Content-Type: text/plain


>> In the end, he felt that this intruision was a feature and touted it
>> to me as a great reason to get an Amex card. All these guys are out
>> there protecting you. 
>> 
>> Privacy advocates might have a different opinion. 

This topic came up in a side conversation at the Internet Mercantile
Protocols BOF at the last IETF.

We asked ourselves why credit card companies, banks, supermarkets,
etc. were so keen on selling information about us.  Not surprisingly,
it came down to money.  The AmEx example is a great one.  By noticing
patterns in my purchasing, they can try to notice a stolen card via a
change in purchasing patterns.  In the long run, this reduces my costs
as an AmEx cardholder (or increases their profits).  If I told them
not to keep my spending patterns, they might not notice if my card was
stolen and used.  The law says my personal liability is limited, but
AmEx has to cover its costs somehow, through their commission or
yearly fee or whatever.  Same goes for the supermarket reselling my
buying patterns.  If they can sell information about me, my groceries
are cheaper (or they make money).  Selling personal information is a
competitive advantage.  For most people, this is more important than
privacy.

People here have advocated setting up a Privacy Credit Union.  I think
this would be a great idea, but I think that its costs would be higher
than its competitors.  When it comes right down to it, privacy costs
money.  And, as antithetical as this may seem to us, many people will
opt for more money in their pocket than more privacy.  Cypherpunks
will bank at Privacy Trust, use their Privacy Visa card, and make
transactions via anonymous digital cash whenever they can.  But other
people, maybe even most people, will choose the higher interest rate
or the cheaper credit card.

We can create technologies, and maybe even infrastructure.  But we
can't make people use it.

My rant for the day :-)

		Marc