Our Bankrupt Privacy Policies
J. Bradley Jansen
August 1, 2002
With each day’s headlines touting the new record bankruptcy, a stock market dive or some corporate malfeasance, it behooves us to act preemptively to check some of the forthcoming problems. After Enron and WorldCom, we need to act now to protect the privacy of customers—before it’s too late.
When a company goes on the chopping block or is forced into a sale, the assets are sold. Bankruptcy is part of the creative destruction process that may be messy, but it frees resources for more productive uses and lays a more solid foundation for future growth and prosperity.
As the easy credit bubble bursts and dot.coms go bust, the customer database is one of the assets that maintain its value. Many companies have a great deal of information about our personal habits. While we may trust those companies to use the information wisely, we generally oppose the use of that information beyond the consented purposes.
Consent is the key. We approve of the sharing of our private, personal information when it is necessary to provide the services we want. A credit card company, for example, has to share some of our information with the airline in order to rack up those frequent flyer miles from our credit card use.
The gratuitous sharing or selling of our personal information without our consent is wrong. While some companies hide behind the excuse that the disclosure notice had an asterisk with fine print permitting otherwise unacceptable behavior, many companies understand that it is good business to match their behavior to the true preferences of their customers.
We cannot even rely on the self-styled privacy advocates at the Federal Trade Commission. The FTC approved the Toysmart.com settlement too prompting Commissioner Orson Swindle to explain his opposition to the decision, “In my view, such a sale should not be permitted because ‘never’ really means never.”
Farmer Mac, as the GSE is more commonly known, may quickly become a test case for our taxpayer-subsidized companies protecting our privacy. With the implied credit quality of Farmer Mac declining from AAA to junk status in the past few months, Farmer Mac has enlisted the services of Weil Gotshal, the most distinguished bankruptcy law firm, and has been buying back its long-term debt obligations in order to keep its bond prices from declining further. Farmers who shared vast amounts of private information with Farmer Mac may find their personal data sold at auction.
Can we trust our courts and politicians to protect our privacy? Don’t bet the farm on it.