by Bill Rounds: Privacy
ARE TRANSACTIONAL DATABASES?
database is where a database transaction might consist of one
or more data-manipulation statements and queries, each reading and/or
writing information in the database. These transactional databases
can data mine and manipulate tremendous amounts of
information about our personal lives, habits and transactions.
Is Gathered/Who Is Gathering?
are aware of the large amounts of consumer and individual information
that is being data mined by businesses and retailers. Shopper cards,
gym memberships, Amazon account activity, credit card purchases,
and many other mundane transactions are routinely recorded, indexed
and stored in transactional databases. Even banking transactions
in almost all countries around the world are recorded in special
databases, eroding bank
If you are
not paying in cash then the information from the purchase along
with your identity is probably being stored on one or more transactional
databases somewhere in the data mining cloud. Even if you are paying
in cash, if you are using some kind of club card that identifies
you as the customer, the information is still being collected. You
may not even know that your information is being collected through
Deal About Transactional Databases
So what if
someone knows what kind of salsa you buy at the grocery store? Who
cares if my credit card company keeps track of every expense? I
do not do anything remotely scandalous or illegal, so what, me worry?
From Transactional Databases
There are several
risks to having your activity data mined like this. I will only
focus on a narrow area. Many entities are in the business of managing
risks. For example, health insurers take on the risk that their
insureds will not get sick, employers take on the risk of the continued
performance of their employees. These kinds of entities must trade
off the cost of gathering information with the value of the information
in assessing the risks associated with the transaction and make
the best business decision. Historically, the cost of gathering
some information was simply too high to include in the calculation
of risk, so these companies chose to transact without the information.
They did not have the powerful tools known as transactional databases.
Also, governments may rely on the information in transactional databases
to tax you
for activities that you engaged in while on vacation outside of
the tax free state where you actually live.
to determine the health of a potential insured, an insurer does
not need the private health records of the person. They simply would
have had to follow around the candidate and see what they ate and
generally assess their lifestyle. They could then use that information
to calculate risk. They do not have a right to this information,
and you do not have to disclose it, but they may choose to gather
this information themselves if it is done in public.
Data Mining Environment With Transactional Databases
The cost to
investigate and gather information on the risk of a transaction
has been reduced dramatically with the maintenance of transactional
databases linked to the identity of transacting parties. The lifestyle
reflected in your spending habits can tell them all they want to
know without hiring an expensive investigator or violating health
privacy laws. The cost of your premiums could be significantly increased
if it is discovered that you eat cholesterol sticks for dinner with
a delicious dessert of artery clog cakes. Insurance premiums might
also increase if you enjoy skydiving, paragliding, rock climbing,
scuba diving or some of the other activities that make life worth
In both cases
the increased information for your counter-party in the negotiation
could lead to increased costs for you. These kinds of transactions
are a negotiation.
The more information that either party can gather then the stronger
their position will be. Few transactions are done with full information
by both parties and so for much of the information available there
is no reason to voluntarily disclose it. But transactional databases
greatly decreases the costs of storing and retrieving this type
From Data Sharing And Transactional Databases
There are some
laws regarding the disclosure of health
and other private information. But the legal protection of privacy
regarding the disclosure of grocery shopping habits and other things
for example is slim to none in the US. Therefore, you are at the
mercy of the self imposed privacy policies of the individual companies
you deal with along with your ability to stay out of those transactional
databases in the first place.
Given the fact
that these privacy policies almost always allow for sharing of information
with “affiliates” and, because the standards for becoming
an “affiliate” are usually extremely low, therefore
there is a serious need to keep the information from being available
from even “affiliates.” It is theoretically easy for
the mega-conglomerate insurance companies to become an “affifliate”
of a multi-national, mega insurance company. If you deal with any
business like that then your personal data is at risk of being catalogued
in transactional databases and sold to the highest bidder.
You Can Do To Protect Yourself From Transactional Databases
Do not use
shopper cards. If you do, use a friend or family member’s
card. If possible use a pseudonym and ghost
address to set up your friend or family member’s card.
to pay for items whenever possible and especially when the expense
reveals your lifestyle or habits. Think
twice before disclosing any information in exchange for goods
or services even if it seems harmless because your personal data
may end up in some transactional databases.
and other tips discussed in the book How
To Vanish, the Bank
Privacy Report, and Tax
Domicile will keep you less vulnerable to unwanted disclosures
of information that could become, at the very least, an economic
annoyance for you. And you never know how long this personal data
will be kept in these nebulous transactional databases.
with permission from How to
Rounds, J.D. is a California attorney. He holds a degree in Accounting
from the University of Utah and a law degree from California
Western School of Law. He practices civil litigation, domestic
and foreign business entity formation and transactions, criminal
defense and privacy law. He is a strong advocate of personal and
financial freedom and civil liberties. This is merely one article
of 73 by Bill