PRIVACY: BANKS vs. MICROSOFT & AOL

A recent study discovered that almost half of you would trust banks to handle online wallets, but most people would not trust Microsoft or AOL to hold the same financial information.

David Coursey’s column today takes a position that I find convincing – that it’s far, far safer to trust Microsoft & AOL with your confidential information than it is to trust banks and financial institutions. Here’s a portion of his argument:

Identity theft is largely a by-product of the casual ways financial services companies now handle information and transactions–the way they promote the use of Social Security numbers as universal IDs, for example, and hand out credit cards like popcorn. I find such lapses much more troubling than worms and viruses. . . . Yet financial services companies hardly take a hit for their complicity in identity theft. It’s just considered the work of criminal minds doing what criminal minds will do. Why isn’t Microsoft similarly seen as the victim of criminal hackers? . . .

The problem to me is that the financial services business has been abusing consumer data forever. Ever have to live with the consequences of a mistake on your credit report? Ever try to get that mistake fixed? That’s the real reason people should worry about the security of their personal data: This is just how these companies do business.

Microsoft, on the other hand, has fewer real uses for your personal information and can make plenty of money without misusing it. In fact, Microsoft could probably make even more money by giving consumers real control over their personal data.

Furthermore, if Microsoft was caught misusing personal data, the negative impact would be much more severe than it would be on financial services companies. Unlike most of those businesses, which exist largely hidden from public view, Microsoft is out there front-and-center every day.