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  From: <spm2101@columbia.edu>
  To  : <cpc@emoglen.law.columbia.edu>
  Date: Fri, 08 Apr 2005 12:49:24 -0400

Re: About those credit cards.

Asma,

I agree with your point that credit card use is unavoidable in today's 
society and is more or less a benefit.  I believe that electronic banking-- 
ATMs, direct deposit, online banking, etc..., has been a net benefit to 
society by making banking much more convenient and stimulating economic 
growth.  I certainly prefer today's electronic banking to the pen and paper 
banking of 20 years ago.

On the flip side, to paraphrase Professor Moglen, there isn't any supreme 
injustice being done when identity theft occurs.  Identity theft sucks, but 
the victim isn't getting mugged or killed, he's just getting 
inconvenienced.  Kind of like getting temporarily stuck in a Kafka novel. 
It isn't a pleasant experience to be sure, but on the scale of possible bad 
experiences, it doesn't rank as too worrisome for me.

The main concern for me is the magnitude of money being stolen by identity 
theft and the number of victims.  It wastes a lot of resources that don't 
need to be.  The surprising thing is that even at the cost of a trillion 
dollars a year, the public still doesn't care.  Public opinion still hasn't 
reached anything close to the critical mass needed to make Congress take 
real action on the issue.  If, as Professor Moglen suggests, anonymity were 
possible to implement, perhaps that would solve the problem more elegantly. 
But I think that unless the public somehow becomes more involved we'll be 
stuck with Congress passing legislation to patch up leaks in the existing 
system.

Steve


--On Thursday, April 07, 2005 7:15 PM -0400 Asma Chandani 
<asc2106@columbia.edu> wrote:

>
>
> I wanted to comment on something Professor Moglen said in class today,
> re: his rebuke at using credit cards. From my perspective, saying don't
> use credit cards is like saying don't drive, or don't use airplanes. And
> I'm about as likely to stop cruising the streets of LA in my 5-speeder
> than I'm likely to borrow money on the equity credit of my future house
> mortgage (versus using a credit card). Yes, there is risk associated with
> using credit cards. But there are also tremendous benefits. In fact,
> credit card companies CAN be a consumer's greatest ally IF used smartly
> and wisely. We talked about the collective action problems at mobilizing
> the masses to secure their identities. Let me offer one group of people
> that could care less about identity fraud, and that could care less if
> higher premiums (interest rates) are passed on to unfortunate others à
> People that pay off their credit card balances IN FULL during the term in
> which they receive the card at 0 percent interest. These wise credit card
> users get the perks that borrowing money from a credit card company can
> yield: good credit history, insurance coverage, mileage points, other
> side benefits, fraud tracker. These people must surely be more diligent
> than the lay borrower: they scrutinize their credit reports a few times a
> year and change credit cards to borrow only during windows of no interest
> charge. These people only pay a minor percentage fee on their first
> borrowing transaction, which in itself is negotiable (particularly so if
> they have a good track record of paying balances in full). So there's at
> least one group in our credit card culture that's content in taxing the
> merchants (the middlemen being charged by the credit card companies) and
> passing on social insurance costs to indigent credit card slaves,
> benefiting at virtually no cost to themselves. And they'll phone in
> customer service when their credit history shows aberration. Now, what's
> so bad charging my Financial Times again?





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