Experian is going public on or about October 11. Manchester (UK) Evening News has a detailed story and background. According to this report, Experian might have a market cap of US$9 billion.
Prepare for an ungodly beast to be unleashed on U.S. taxpayers. Unfortunately this is a fait accompli. The IRS is going to use collection agencies to collect back taxes. Look, getting tax revenues that are left on the table is great. But how can this be a good thing?
Reasons to be concerned:
GuardMyCreditFile reports on one hell of a story.
Of all the bad ideas to come out of Washington within the past twelve months, this one has got to be in contention for the "dumbest" award. Beginning September 7th, the IRS will begin using private collection agencies to go after people who owe back taxes. The new policy will be a windfall for collection agencies but is likely to cost tax payers more than $80 billion in lost revenues over the course of the next ten years. At the same time, the policy is likely to lead to significant privacy breaches, scams and consumer abuses.
Under the plan which has been approved by Congress, collection agencies will make a commission of anywhere from $0.22 to $0.24 on every dollar that is collected. It is expected that agencies will make $330 million annually from the deal. According to the IRS, using private collection agencies will be significantly more expensive that using IRS employees would be. In fact, IRS employees only cost tax payers $0.03 to $0.04 for every dollar collected.
One of the more common ways to have your identity stolen is the theft of personal materials from your home. Often by someone you know—a family member or worker. But did you know that virtually every mechanical lock, like those on your front door, can be opened easily with something called a bumpkey? A bump key is essentially a master key for every lock of its type. The key is filed to a particular length, put into a lock, and with just a slight tap with a hammer or screwdriver, your lock is opened! Your lock isn’t broken at all, it just opened as if you opened it yourself. Even worse, if a thief breaks into your house with a bumpkey there is no trace of forced burglary. They walk in and out with all your stuff. Your insurance company probably won’t pay you cent! You will be told it is your fault—that you left your door open. Watch this video below for the depressing facts (English subtitles).
Qsent is a company that keeps an up to date database of people’s most current contact information. They also are supposed to be working on what some call a do-not-call registry especially for cell phones. Actually, the deal is that the mobile phone operators appear to want to include every cell phone into a centeral 411 registry which can be sold to telemarketers. Qsent would be the folks that maintain the database on behalf of the mobile phone companies. Read the Qsent CEO’s testimony before the U.S. Senate Committee on Commerce, Science and Transporation in 2004. I’d like to hear from Jim Malmberg if he knows more about this 411 cell phone registry.
Portland Biz Journal has more on the aquisition.
Nice to see a cross-agency law enforcement training program in identity theft. More from GovTech. Including local police, sheriff, and federal officers.
During the four-hour course, officers were trained in the latest investigative techniques, including the areas of victim assistance, identity theft rings, prosecution of offenders and criminal law.
According to Yahoo! Finance, Intersections, Inc. (INTX) saw its Q2 net income decrease 13% compared to last year, while revenue increased nicely by 11%. I don’t know what impact their acquistion of CMSI had on this quarter’s results.
They also snuck in this little tidbit of news. They added a new seat to the board (9 members now). The new director is the son of an exsiting board member. That seems strange. I tried to research this on the Intersections web site but the investor relations section doesn’t function right now (sigh). It gives me this wonderful error on my browser:
CCBN internal only message:
In order to run on the Phoenix Platform, the url requires two parameters: C (Corp Master Id) and P (Page Name).
GUS, plc, the UK-based parent of Experian, one of the three main U.S. credit reporting companies, has announced plans for Experian’s IPO. In a news release entitled Demerger of ARG and Experian, by October 2006 Experian will be an independent company listed on the London Stock Exchange (and outside the grasp of U.S. regulators such as the SEC). More from GUS:
GUS plc, the retail and business services group, announces that it has commenced posting documents to its shareholders proposing the demerger and public listing of its two remaining businesses, Argos Retail Group (ARG) and Experian.
Subject, inter alia, to shareholder approval, the demerger will result in GUS shareholders receiving one share in each of ARG and Experian for every GUS share they hold. Immediately following the demerger, it is expected that Experian will issue further shares to raise new capital of approximately £800m.
The expected timetable to achieve this is as below:
Tuesday 29 August 2006 EGM to seek shareholder approval for the demerger
Thursday 14 September 2006 Approximate date of publication of ARG and Experian prospectuses
Friday 6 October 2006* Suspension of listing of, and dealings in, GUS shares at 4.30pm
Tuesday 10 October 2006 Demerger becomes effective
Wednesday 11 October 2006 Shares in ARG and Experian commence trading at 8am
It’s tiring trying to keep up with the moving targets that are the new data breach and ID theft bills moving through Congress. But Beth Givens of the Privacy Rights Clearinghouse and Ed Mierzwinski at U.S. PIRG warn consumers that a vote may be approaching next week on HR 3997 (Financial Data Protection Act). This bill covers, among other things, data breach notification and credit freezes. In its current language, it would seriously weaken consumer protection laws nationwide. Although it has improved somewhat since its last incarnation. I will quote from Beth’s newsletter liberally here, because she explains it well. I hope she won’t mind, it’s such an important issue. Please see the PRC web site for details:
Here's why we continue to consider H.R. 3997 to be bad for consumers. At least 34 states have passed laws requiring companies that experience data breaches to notify individuals that their sensitive personal information has been compromised. This enables consumers to take steps to prevent identity theft, such as placing fraud alerts on their three credit reports. The strongest of those state laws, including California's, require that the breached organizations notify individuals in each instance.
H.R. 3997 allows companies to decide whether or not they think the breach will result in harm to individuals before deciding to notify individuals. This is called “trigger language.” We believe this provision will result in many breaches not being disclosed to the affected individuals at all. We don't think companies that experience breaches, especially when SSNs are involved, can foretell the future, at least not at this time. To make matters worse, this bill would pre-empt all of the breach notice laws passed by states, thus wiping out strong consumer protection provisions across the country.
The only good thing to report about H.R. 3997 is that the security freeze provision has been removed. In our previous newsletter , we explained that this bill would only allow victims of identity theft to freeze their credit reports – AFTER the harm has been done. We strongly believe that ALL consumers should have the ability to freeze their credit reports – the ultimate identity theft prevention strategy that individuals have.
Jim at GuardMyCreditFile fires both barrels at Congress pointing a finger at the campaign contributions saying
…And if you want to know why Congress would consider legislation that is so clearly opposed by their constituents, you need look no further than campaign contributions. Two of the bill’s four co-sponsors are on the financial services industries "top 10 list" for campaign donations.
Jim’s blog post has a really cool feature you should check out. If you plug in your address and ZIP, it instantly tells you your US Rep and Senators, without even jumping to another page. And Consumers Union has a web page that makes it very easy to send a message to Congress.
I haven’t yet read the new version of H.R. 3997, but Ed points out:
It also includes a little-noticed provision that immunizes credit bureaus from the so-called credit repair doctor laws, giving them carte blanche to deceive consumers about their over-priced credit monitoring services.
Finally, the PRC, U.R. PIRG, Consumers Union and many others believe that a “competing” bill, HR 4127 is a vastly superior piece of proposed legislation (read their sites to find out why). One of the major reasons I find 4127 attractive is giving all consumers access to secret profiles that are kept on virtually everyone at the many data brokers, as the PRC points out:
H.R. 4127 contains an additional provision that is especially valuable for consumers. It gives individuals new rights to review and dispute information held by the large data brokers such as ChoicePoint and Lexis-Nexis. This industry is unregulated at this time. Yet the data warehouses of information brokers contain detailed profiles on virtually every American adult. It's long overdue for consumers to have access to their data files and to make sure the information is correct.
Update: The U.S. PIRG Consumer Blog says “House Action On Privacy Likely Delayed.”
Update 2: The vote has been delayed.