Hotwatch - Tracking Your Credit Card Use

Do you make purchases with a credit card, or use your debit card to withdraw money from an ATM? The records maintained by your credit card company and bank can return a detailed picture of your life. A complete record of your purchases are associated with your credit card. Additionally, point of sale transactions (i.e. you present your credit card to the merchant) create a record of your location at the time of purchase. Someone monitoring your credit card transactions has near real-time data about your location, and what you are buying / doing.

Under a program called "Hotwatch" Federal law enforcement agencies can engage in real-time tracking of Americans' credit card purchases, use of calling cards, car rentals, and even purchases made using store loyalty programs.

“The act is called "Hotwatch" and in a nutshell means that the government can watch in real time the activity of credit card transactions, airline and hotel reservations, debit card transactions, cell phone calls, and rental car activities of its own citizens… The Feds don’t have to have a warrant, in fact the DOJ... stresses that the preferred way to execute a hotwatch is to bypass the protections provided by the Fourth Amendment to the Constitution and instead use a subpoena to order credit card issuers and other retailers to provide detailed real time information about the financial moves of the person being watched.  A judge then orders a non-disclosure order, which insures that the target will never know they’re being watched… No one knows how many of these hotwatches have occurred, or even who exactly the government is spying on. There appears to be no judicial oversight, and... it was the government’s intention to keep the program a secret.” (Chen 2011).

All of your credit card and debit card transactions are recorded. At a minimum your credit card company will have the date, time, amount of transaction, merchant category code, and whether the card was present for the transaction (i.e. you made the purchase in-person, on-line, or over the telephone). Because many businesses itemize receipts (look at the receipt from the grocery store the next time you go shopping) an exact record of your purchases can be made. Even with just the merchant category code (MCC), it is possible to develop a good picture of someone’s lifestyle. Some MCC include:

4900 Bail and bond payments
5921 Packaged beer, wine, and liquor stores
5933 Pawn shops
5813 Bars and nightclubs
7273 Dating / Escort Services
7297 Massage Parlors
7277 Counseling services (debt, marriage, personal)
8651 Political organizations
7995 Betting / Casinos / Gambling
9211 Court costs (child support and alimony payments)
5912 Drug stores and pharmacies
8062 Hospitals
8011 Doctors

Keeping a record of just the type of business you frequent can provide a detailed, though perhaps misinterpreted, view of your lifestyle. Are you an alcoholic – MCC 5921? Do you have a gambling problem – MCC 7995? Are you having personal or family problems – MCC 9211, MCC 7277, MCC 4900? Are you sick – MCC 8062, MCC 8011, MCC 5912? Ask yourself whether there are some things in your life that you would rather not have becoming a permanent record with your credit card company. If there are, consider where you use your credit card.

Hotwatch isn't a new program, rather as far back as 2005 we see, in documents obtained by the Electronic Frontier Foundation (EFF), that: "Currently, the government routinely applies for and upon a showing of relevance to an ongoing investigation receives “hotwatch” orders issued pursuant to the All Writs Act. Such orders direct a credit card issuer to disclose to law enforcement each subsequent credit card transaction effected by a subject of investigation immediately after the issuer records that transaction." (EFF. October 11, 2005)

So, is it possible to spend money without being tracked? Yes to some extent, but the sad truth is that most people have no choice but to use the banking system to do things like make mortgage payments, pay your taxes, or collect your salary or payments for business services.

However, you can make it a lot harder for people to track you. If you limit your use of the banking system, you can create a much smaller profile to track. A good basic method of limiting tracking is to make as many purchases as possible with cash. Use cash for such purposes as buying groceries, gas and items you want to keep private (i.e. guns, survival supplies, medications).

Cash is still the only method you can use that does not leave an electronic trail or a paper trail directly connecting you to purchases. Try returning to the old-fashioned method where you get a specific amount of cash out of the bank each week to pay for what you need. There still will be a record of the weekly withdrawal from your bank, but not of the actual purchases you make each week.

The advent of the ATM makes it easier than ever to get cash, so there’s no excuse not to use cash for most retail transactions. If you can get into the habit of using cash, you can make it easier to budget and make it far harder for banks to track your transactions.