U.S. GOVERNMENT, BANKING INDUSTRY,
CREDIT REPORTING AGENCIES:
How Private Is Your Life?
Peter Maas (Parade Magazine, April 1998)
I have an acquaintance named Fred P. Smith. Actually, that’s not his real name. I’m not using his real name because, as I have discovered in preparing this article, it is about the only shred of privacy he has left. And, Fred Smith just as easily could be you or me.
The concept of the right to privacy was a treasured hallmark of the American way of life, institutionalized early on, indeed, by our Founding Fathers in the Fourth and Fifth Amendments to the U.S. Constitution. But that was long before the presence of hordes of private investigators and rapacious marketeers in an era of advanced computer technology that today draws on heretofore private information contained in vast databases that most Americans don’t even know exist.
As a result, there are at this writing some 80 different patchwork bills pending in Congress aimed at restricting the flow of intimate personal data in cyberspace, now available to anyone browsing through the World Wide Web. Unfortunately, as the saying goes, the horse appears already to have departed the barn.
To learn precisely what was what, I visited the offices of Sutton Associates, located on New York’s Long Island, which specializes in investigating services. Its president is James F. Murphy, a retired FBI agent. (As an agent, Murphy once had been a heroic headline figure. He had shot and killed one of two bank robbers holding a number of hostages at gunpoint as they tried to make their escape. The dramatic moment was later portrayed in the movie Dog Day Afternoon.)
As one of the most reputable firms of its sort in the nation, Sutton Associates limits itself primarily to background screenings for potential employment hirings and “due diligence” probes on behalf of corporate clients involved in buyouts, mergers, acquisitions and divestitures, all of which are considered quite legitimate. Sutton will not, on the other hand, accept divorce or criminal defense cases.
Recently, a company asked Sutton to locate a female consultant, now retired, who was urgently needed for a new project. The only information supplied was her name and that she was believed to reside somewhere in the vicinity of Washington D.C. She wasn’t listed in any phone books. it took no more than five minutes to come up with seven candidates with the same name, one of whom – the right one – met the appropriate retirement age of 64. But she had moved from her home in northern Virginia. So it took perhaps another five minutes to get a correct updated South Carolina address from one of the three major credit bureaus – Equifax, Experian and Trans Union – whose data banks record anyone who ever used a credit card.
My agreement with Jim Murphy was that Sutton Associates would demonstrate how a dossier could be compiled on an individual (not necessarily a job it actually would undertake). On occasion, a corporate client will ask Murphy if he can find out thus-and-such about someone. If Murphy considers the information beyond the bounds of propriety or legality, his standard reply is “Yes, but I won’t.”
I supplied Murphy with the name of “Fred P. Smith”. The only other information I provided was that he resided in the U.S. and was in the securities business. Sutton Associates had 72 hours to find out whatever it could about him.
The search began with what is called a “surname scan” which can be done nationally, regionally or locally based on data banks that have been compiled from such public source documents as voter registrations, motor vehicle records (some states like Maryland actually sell these records) and real property listings.
Given the severe time constraints I had imposed and the fact that “Fred” was in the securities business, which could likely mean a Wall Street brokerage house, Sutton Associates elected to start with the greater New York City area. His middle initial helped narrow the field to 27 possibilities.
A so-called “credit header” search was then used to establish his occupation. These headers – essentially bare-bones I.D. reports maintained by credit agencies – list not only occupations but also Social Security numbers, dates of birth and residential addresses. This information is also instantly available, for a modest fee, to subscribers to commercial databases, such as one called DBT-Online. An executive name search using Dun & Bradstreet’s Dun’s Market Identifiers, confirmed that Smith was an officer in his brokerage firm.
A Cole’s directory – actually a reverse directory in which phone numbers and addresses are cross referenced for the whole country – is contained on sets of CD-ROMs. Once an address is known, the names of every other resident in that building or neighbors on a suburban block can be ascertained, opening the door to more intensive field investigations of any designated target.
A property search, such as those available from a Lexis-Nexis service, showed Fred Smith’s previous residences, charting his rise from an apartment in a lower-middle-class neighborhood in one of the city’s outer boroughs to a condominium on Manhattan’s Upper East Side with a purchase price of more than $2 million. It also revealed that he owned a luxury sedan and a sport utility vehicle, as well as another condo at a ski resort. Such information would come into play if he were subject to bankruptcy proceedings, tax liens, or civil judgments. As it happened, his record was clear in these areas, nor was there any criminality.
It was revealed, however, that Fred – in his late 40’s and married with two children – had a separate apartment in the city. Surveillance indicated that a young, attractive woman was in residence there. While adultery generally is not a financial factor in a divorce settlement, it could come into play if child custody became an issue. It might leave him open to blackmail as well.
Jim Murphy stopped Sutton Associates short of delving deeply into the lifestyle of Fred Smith. But if he had wanted to, Murphy could have learned about the restaurants Fred frequented, his airline travel, hotels he stayed at, his salary, ownership of stocks and bonds, his phone records, any evidence of addiction to drugs or alcohol (such as DWI arrests) or gambling, where his wife shopped and what she bought, how much money she spent, what schools their children attended, even the current state of their marriage.
But, in addition to circumspect firms like Sutton, there are other avenues open in the explosion of available personal information, chief among them “information wholesalers” that cater to private investigators, bill collectors, insurance agents and similar interested parties, such as business competitors.
One is Advanced Research Inc. located in Stroudsburg, PA. it offers a range of intimate data that includes detailed credit card activity, long distance and intrastate toll calls, bank account numbers, deposits and balances, wire transfers, a beeper trace, a cellular phone trace, an employment history, business client lists, life insurance policies and medical treatment history going back as much as ten years.
I decided to offer myself up as a guinea pig. I allotted Advanced research 48 hours to come up with an unlisted phone number, a month’s worth of toll calls and information about any bank accounts I had, either separate or held jointly with my wife. (I skipped a request for my medical treatment history when I learned that this would take four to six weeks. But I have no doubt that the firm would have delivered, based on its performance in other areas.)
As promised, it quickly came up with my unlisted number – not especially surprising, since I’ve had to include it on applications for various utility services and cable TV as well as warranties for purchases I had made (naively supposing it would not be disseminated elsewhere.)
But two other unlisted numbers, which I have never given out, also were included. So were the tolls calls I had made on all three lines, which, when matched with my phone bills, were right on the money. All my bank account information – the account numbers, the banks involved, balances, and deposits for the previous month – also was disturbingly accurate.
Michael Martin, who heads up Advanced Research, was coy about how this information was gathered. “These are well-guarded trade secrets”, he told me. He said that he had specialists on call throughout the country who are allowed to “pursue their own methods.” Defending his operation, he added: “In finding deadbeat dads, getting key evidence in child custody cases, locating hidden assets in court ordered judgments, why pay high attorney fees when we can do the job a lot quicker, a lot better and a lot cheaper?”
Jim Murphy of Sutton Associates said he was concerned about the other (unnamed) companies, who engage in unscrupulous privacy incursions. “This is a business where you can’t be partially pregnant,” he said. “If you have people who don’t care, you’re asking for regulations that will hurt all legitimate private investigators.”
Murphy pointed to a Dallas businessman, John Spano, as an example of the importance of the kind of “due diligence” investigations that Sutton Associates is engaged in. Spano – claiming assets of more than $250 million in offshore accounts and Treasury Bills – had received loans of $8 million from a Dallas bank and $80 million from a Boston bank toward acquiring a National Hockey League franchise, the New York Islanders. It all fell apart when Spano failed to meet a $16.8 million installment payment for the Islanders on a total purchase price of $165 million and pleaded guilty to fraud. It was then reported in court that his assets totaled barely more than $1 million. The NHL had conducted only a cursory investigation of Spano’s assets before approving his purchase of the team.
Still, as alarm over the invasion of privacy grows, 14 of the largest database companies – fearful of restrictive legislation – recently agreed to attempt to regulate themselves by adopting guidelines that would limit access to personal information by the general public.
The rub is that private investigators are an exception to the rule. According to P.I. Magazine, there are about 60,000 licensed private eyes operating in the U.S. The qualifications vary from state to state. Some states – like Colorado, Alabama, Mississippi, Idaho, and South Dakota – don’t require licenses at all.
There remain certain steps an individual can take to protect against unwarranted privacy invasions. The great irony is that a fundamental building block in creating a personal dossier is your Social Security Number. Yet when the Social Security Act of 1935 was originally passed by Congress, an individual’s number was not to be used as an identifier for other that Social Security purposes.
Who could have imagined what would subsequently happen? Today, to apply for just about anything, you are required to give the number up.
Kriegel’s Note: What struck me when I first read this article and if you read it carefully, you too will see that it’s the “rich” (probes done on behalf of corporate clients; government agencies, insurance companies, law firms, and so forth) who are doing the snooping. If government wanted to put a handle on this invasion – the Social Security Number would remain private, and credit reporting agencies would be illegal. Did you know that anyone can break into your credit file without that inquiry showing up on the credit agency’s report? So, if you think checking your credit file is going to tell you the whole story of who’s doing the snooping, boy are you wrong.