How credit card issuers can help curb gun violence
Bankers should pay heed to New York Times financial columnist Andrew Ross Sorkin’s recent report about the connections of card purchases to mass killings, like the one last year at Marjory Stoneman Douglas High School in Florida that took 17 lives.
His key point is, “Many of the killers built their stockpiles of high-powered weapons with the convenience of credit cards.” Notably, Sorkin doesn’t argue for a prohibition of those sales. He only asks that issuers alert law enforcers of them to stop potential “massacres.”
He says issuers should do so because they have the ability to detect potentially dangerous gun purchases before anyone else.
Sorkin is right.
Boiled down, his message is akin to the Homeland Security’s summons to patriotic duty: “If you see something, say something.”
Sorkin says issuers can “create systems to track gun purchases that would allow them to report suspicious patterns.” He notes they already do this in a number of areas. For example, to stop money laundering, fraud, terrorism and other crimes.
Based on 40-year connections with the card industry, card issuers have the expertise to detect suspicious gun behavior that can lead to mass killings. They are after all masters of mining, collecting, interpreting and exploiting trillions of bits of almost microscopic information about consumers.
Their industry literature often brags that mining can detect a consumer’s market inclinations even before the consumer is aware of it.
Data mining in fact is a fundamental component of card industry competition. Issuers do it every day around the clock because they believe it increases sales and market share. Sorkin, in effect, argues they should utilize their mining to achieve a moral objective — to help prevent killings that shock the world.
Sorkin recognizes there are other sides on the issue. One is that pressing issuers to track gun sales could lead to a slippery slope of demands for similar actions involving other allegedly anti-social behaviors. Another is that it could raise consumer privacy concerns.
Let me reply to both charges. The risk of a slippery slope should never be a reason for banks to ignore potentially serious crimes they become aware of in the normal course of business, especially crimes of violence. A “see no evil” approach creates its own slippery slopes. One against the reputation (indeed the bad behavior) of banks for asserting it. Another, bills by politicians imposing expensive remedies.
Bankcard issuers should keep in mind that the extensive legal regime they live under is largely the result of slippery slopes their industry ignored for decades. For example, “truth” in lending, discrimination, unfair fees, credit reporting, billing errors and collection practices. All of them once were slippery slopes the industry failed to take seriously.
That said, the card industry has a long, impressive history of self-regulation involving questionable customer behavior: gambling, fraud, theft, prostitution, hard-core pornography, dishonest merchants and more. A clincher in support of Sorkin’s position is it accomplished this in tandem with law enforcement agencies.
The other argument —that helping law enforcers via data tracking raises invasion of privacy issues — is preposterous on its face. Preposterous because the bulk of the industry’s massive tracking is done without the permission of cardholders. When all is said and done, card issuers play the game pretty much like Facebook, Amazon, Google and Apple.
When I was chief counsel in the 1990s for Citi’s card programs, I was always on the lookout for articles like Sorkin’s. I knew they could quickly get out of hand, generating negative media coverage, political attacks and even lawsuits.
I warned management to get ahead of the risk, which often required changing our practices, making amends to our cardholders, alerting regulators or at the least putting together a believable defense.
To me Sorkin’s article is that kind of déjà vu all over again.
Issuers should take the lead on the issue Sorkin poses by following his advice. For starters, they should poll their cardholders and consumers in general to see what they think. Ditto their employees and, closer to home, their families.
It’s an easy bet what they would hear from the majority: resounding support for the principle, “If you see something, say something.”
In short, card leaders should recognize that the Times has done their industry a favor by giving them good reasons for helping law enforcers on the sale of guns. Ignoring the favor will prove to be a major blunder.
I learned that lesson play out 14 years ago when I helped the Times produce a "PBS Frontline" documentary, “The Secret History of the Credit Card.” Issuers ignored its message and a few years later Congress made them pay for it many times over with the Credit CARD Act of 2009.
It is likely the House will respond to Sorkin’s article with some kind of proceeding. It’s even more likely the trial bar will see it as an opportunity, not only to garner headlines but to inflame jurors that bank negligence contributed to a mass killing. Only a fool would ignore those risks.