Question
ROBERT SMITH, HOST:
It was a big week for apologies, and they all happened to come from one person - Richard Smith.
(SOUNDBITE OF MONTAGE)
RICHARD SMITH: I'm truly and deeply sorry for what happened. I deeply apologize.
Mistakes were made which, again, I deeply apologize.
I apologize for that, but that is what happened.
UNIDENTIFIED MAN #1: OK, moving on.
KENNY MALONE, HOST:
Richard Smith was testifying before Congress because he is the now former CEO of Equifax, which informed us last month that basically all of us have been hacked.
ROBERT SMITH: The company announced that the information for almost 150 million Americans has been compromised. And I know you've heard this sort of thing before with other hacks. But this hack is different because for starters, you did not sign up for Equifax, which is one of the three major credit bureaus. And for basically your entire life, they have been slurping up and storing your most personal information.
MALONE: Which means that Equifax and maybe now the hackers know my Social Security number and my address, and the fact that I opened a Gap credit card, and the fact that I missed a payment last month, and the fact that I only paid $300 towards my Subaru Impreza instead of the 400 that I normally pay.
ROBERT SMITH: Times are tight.
MALONE: They know everything.
ROBERT SMITH: One hundred and fifty million Americans looking over our shoulders for the rest of our lives, worried about someone filing our tax forms and taking our refunds.
MALONE: My personal nightmare is somebody walking into Home Depot, opening up a credit card with my name on it, grabbing a giant orange shopping cart and filling it with drills and circular saws and shop vacs.
ROBERT SMITH: And getting 10 percent off the whole thing. That's what really bugs me.
MALONE: It's my 10 percent.
ROBERT SMITH: My discount.
MALONE: At any rate, it's bad, which was pointed out to Richard Smith by a lot of our elected representatives.
(SOUNDBITE OF MONTAGE)
GREG WALDEN: Talk about ham-handed responses. This is simply unacceptable.
ELIZABETH WARREN: Senior executives like you should be held personally accountable here.
UNIDENTIFIED MAN #2: So here in my last 13 seconds I'm going to speak to America. And I'm going to say for the 145 million people, file a lawsuit. Otherwise they're going to keep doing to you what they've been doing to you forever.
ROBERT SMITH: Hello, and welcome to PLANET MONEY. I'm Robert Smith.
MALONE: And I'm Kenny Malone. And this Equifax hack, it feels like a dystopian sci-fi future. We've got shadowy hackers roaming through our data in this central location that we didn't even sign up for. And it feels like such a modern-day problem.
ROBERT SMITH: And yet this whole mess goes back to one moment, a moment when two brothers in Brooklyn decided they were going to sell our private information to the world, and that we were not going to be the customers. We were going to be the product.
MALONE: This happened 150 years ago. And people were asking themselves the same questions we are asking ourselves now - who owns your information? Who has a right to see that information? And is there any limit on what someone is allowed to dig up on you?
ROBERT SMITH: It is quite the story. We'll have it after the break.
(SOUNDBITE OF MUSIC)
MALONE: Hey, Nora.
NORA LYONS: Hi.
MALONE: This is Robert.
LYONS: Nice to meet you.
ROBERT SMITH: Thanks.
MALONE: Show us the way to the secret documents.
ROBERT SMITH: We heard that one of the very first credit reports ever, precursor of this whole Equifax thing, was in the archives here at The New York Public Library. Nora Lyons helped us pull it out of storage showed us to the famous Rose Reading Room, beautiful room at the top of the library. And a research coordinator named Rebecca (ph) walks in and gently holds this little blue booklet out to us.
MALONE: I brought a pair of gloves. I didn't know if we would need them to touch - no.
LYONS: No, you don't wear them with this.
ROBERT SMITH: It's not the Gutenberg Bible.
MALONE: I thought it was.
REBECCA: Well, you wouldn't - you wouldn't wear gloves with the Gutenberg either.
LYONS: Because if it snags...
MALONE: Wait, really?
REBECCA: It's going to rip the paper.
MALONE: The front of this book says "Retail Mercantile Agency 1874."
ROBERT SMITH: It looks like a phonebook.
MALONE: There's a list of about 4,000 people who live in Brooklyn.
ROBERT SMITH: Back in the day.
MALONE: And then next to each name is an address and then some old-timey job - butchers, druggists.
ROBERT SMITH: So many grocers. And there was a sailor of some sort.
MALONE: What's his name? Oh, it's just Captain Collins (ph).
ROBERT SMITH: Captain Collins always pays his debts. He gets an A.
MALONE: Does it say that?
ROBERT SMITH: He does get an A.
MALONE: And sure enough next to each name is a letter, a letter grade that tells us just how trustworthy Captain Collins was. So we flip to the front of the book.
ROBERT SMITH: Oh, look; right here.
MALONE: So this is the key.
ROBERT SMITH: An A means that the captain pays his debts right away. If there had been a B there, it would mean that he always paid in cash. Letter C would mean perhaps he didn't always pay his debts on time.
MALONE: And then there's one final code, and it's an ampersand or, like, the...
ROBERT SMITH: And.
MALONE: Like an and. And it basically means we're not going to put this person's rating in this book. Come talk to us. There's some stuff you should probably know about this person.
ROBERT SMITH: We had some questions about how the book worked in real life in Brooklyn back in the day, so we went to an expert, Josh Lauer. He wrote a book.
JOSH LAUER: My book is called "Creditworthy: A History Of Consumer Surveillance And Financial Identity In America."
MALONE: You went - you went for broke on that subtitle.
LAUER: I did.
ROBERT SMITH: Josh explained to us that credit in the early 1800s, it was not what we think of today. It wasn't credit cards or auto loans because, like, obviously those did not exist back then.
MALONE: What credit meant was a tab at your town store. So let's say that Robert Smith, you are a farmer and it's 1825. What crops are you...
ROBERT SMITH: Farm apples.
MALONE: Apples, OK. So Robert goes into the grocery store to pick up whatever he needs, maybe like some butter, some cigars. And Robert tells the grocer...
ROBERT SMITH: Yeah, I don't have any money. The apple crop hasn't come in yet. And so I'm going to need you to extend me some credit.
MALONE: And I, as the grocer, I look at Robert and I say, oh, Mr. Smith. Well, I know your uncle and I've known your father, and darn it if I don't trust the Smiths more than I trust myself.
LAUER: And he says, take your butter, take your cigars. I know you'll come back next week and you'll settle. And...
ROBERT SMITH: And good day, sir.
LAUER: And good day.
MALONE: And that system worked for a long time. But after the Civil War, people started moving around, heading to cities, especially Brooklyn, N.Y.
ROBERT SMITH: Give me a little sound effects from Brooklyn.
LAUER: How about this? Extra, extra, read all about it - population of Brooklyn booming.
MALONE: Love it.
ROBERT SMITH: Love it.
This created a problem. More strangers were showing up at the grocery store looking to buy things on credit, and the grocer needed to answer a pretty simple question - will this person pay me back? I know nothing about him.
MALONE: Enter the Cells (ph) brothers.
LAUER: Herman (ph) and Conrad (ph) Cells. And there isn't a lot of evidence that survives about them and about who they are.
ROBERT SMITH: So for the purposes of this story, we can imagine them however we like. You know, handlebar mustaches, blue velvet vests.
MALONE: Maybe some monocles, maybe pocket watches.
ROBERT SMITH: A jaunty cane.
MALONE: Cane - yes, yes. The Cellses were Mr. Peanutses.
ROBERT SMITH: They were two Mr. Peanuts.
MALONE: The Cells brothers were in Brooklyn in 1869. And they start going around to the butchers and the druggists and the tailors.
LAUER: And saying, we're organizing a list of all customers in our neighborhood.
MALONE: So it would be great, dear cobbler, if you would let me look at your books and find out who's in there, who pays cash, who uses credit, who pays back that credit. And that way if a stranger named Robert Smith walks into my store, I would just pull out the Cells book.
ROBERT SMITH: Oh, yeah, look right here - Robert Smith, plumber, 1102 Lafayette Avenue, B-A. Always pay in cash, always pay on time.
MALONE: Robert Smith.
ROBERT SMITH: Smith motto.
MALONE: Is that true?
ROBERT SMITH: That's - no. No.
The one thing that struck us when we looked at this little pamphlet is you could almost feel the Cells trying to be as careful as humanly possible to give the minimum amount of information. They're not judging people. They're not slandering them. They just put down the name, the job and a simple little rating.
MALONE: It was almost as if the Cells knew that if they were going to create an industry where people's information was the product that maybe, like, just maybe you should be careful with that information.
ROBERT SMITH: So we should note it says confidential on here.
It was a big week for apologies, and they all happened to come from one person - Richard Smith.
(SOUNDBITE OF MONTAGE)
RICHARD SMITH: I'm truly and deeply sorry for what happened. I deeply apologize.
Mistakes were made which, again, I deeply apologize.
I apologize for that, but that is what happened.
UNIDENTIFIED MAN #1: OK, moving on.
KENNY MALONE, HOST:
Richard Smith was testifying before Congress because he is the now former CEO of Equifax, which informed us last month that basically all of us have been hacked.
ROBERT SMITH: The company announced that the information for almost 150 million Americans has been compromised. And I know you've heard this sort of thing before with other hacks. But this hack is different because for starters, you did not sign up for Equifax, which is one of the three major credit bureaus. And for basically your entire life, they have been slurping up and storing your most personal information.
MALONE: Which means that Equifax and maybe now the hackers know my Social Security number and my address, and the fact that I opened a Gap credit card, and the fact that I missed a payment last month, and the fact that I only paid $300 towards my Subaru Impreza instead of the 400 that I normally pay.
ROBERT SMITH: Times are tight.
MALONE: They know everything.
ROBERT SMITH: One hundred and fifty million Americans looking over our shoulders for the rest of our lives, worried about someone filing our tax forms and taking our refunds.
MALONE: My personal nightmare is somebody walking into Home Depot, opening up a credit card with my name on it, grabbing a giant orange shopping cart and filling it with drills and circular saws and shop vacs.
ROBERT SMITH: And getting 10 percent off the whole thing. That's what really bugs me.
MALONE: It's my 10 percent.
ROBERT SMITH: My discount.
MALONE: At any rate, it's bad, which was pointed out to Richard Smith by a lot of our elected representatives.
(SOUNDBITE OF MONTAGE)
GREG WALDEN: Talk about ham-handed responses. This is simply unacceptable.
ELIZABETH WARREN: Senior executives like you should be held personally accountable here.
UNIDENTIFIED MAN #2: So here in my last 13 seconds I'm going to speak to America. And I'm going to say for the 145 million people, file a lawsuit. Otherwise they're going to keep doing to you what they've been doing to you forever.
ROBERT SMITH: Hello, and welcome to PLANET MONEY. I'm Robert Smith.
MALONE: And I'm Kenny Malone. And this Equifax hack, it feels like a dystopian sci-fi future. We've got shadowy hackers roaming through our data in this central location that we didn't even sign up for. And it feels like such a modern-day problem.
ROBERT SMITH: And yet this whole mess goes back to one moment, a moment when two brothers in Brooklyn decided they were going to sell our private information to the world, and that we were not going to be the customers. We were going to be the product.
MALONE: This happened 150 years ago. And people were asking themselves the same questions we are asking ourselves now - who owns your information? Who has a right to see that information? And is there any limit on what someone is allowed to dig up on you?
ROBERT SMITH: It is quite the story. We'll have it after the break.
(SOUNDBITE OF MUSIC)
MALONE: Hey, Nora.
NORA LYONS: Hi.
MALONE: This is Robert.
LYONS: Nice to meet you.
ROBERT SMITH: Thanks.
MALONE: Show us the way to the secret documents.
ROBERT SMITH: We heard that one of the very first credit reports ever, precursor of this whole Equifax thing, was in the archives here at The New York Public Library. Nora Lyons helped us pull it out of storage showed us to the famous Rose Reading Room, beautiful room at the top of the library. And a research coordinator named Rebecca (ph) walks in and gently holds this little blue booklet out to us.
MALONE: I brought a pair of gloves. I didn't know if we would need them to touch - no.
LYONS: No, you don't wear them with this.
ROBERT SMITH: It's not the Gutenberg Bible.
MALONE: I thought it was.
REBECCA: Well, you wouldn't - you wouldn't wear gloves with the Gutenberg either.
LYONS: Because if it snags...
MALONE: Wait, really?
REBECCA: It's going to rip the paper.
MALONE: The front of this book says "Retail Mercantile Agency 1874."
ROBERT SMITH: It looks like a phonebook.
MALONE: There's a list of about 4,000 people who live in Brooklyn.
ROBERT SMITH: Back in the day.
MALONE: And then next to each name is an address and then some old-timey job - butchers, druggists.
ROBERT SMITH: So many grocers. And there was a sailor of some sort.
MALONE: What's his name? Oh, it's just Captain Collins (ph).
ROBERT SMITH: Captain Collins always pays his debts. He gets an A.
MALONE: Does it say that?
ROBERT SMITH: He does get an A.
MALONE: And sure enough next to each name is a letter, a letter grade that tells us just how trustworthy Captain Collins was. So we flip to the front of the book.
ROBERT SMITH: Oh, look; right here.
MALONE: So this is the key.
ROBERT SMITH: An A means that the captain pays his debts right away. If there had been a B there, it would mean that he always paid in cash. Letter C would mean perhaps he didn't always pay his debts on time.
MALONE: And then there's one final code, and it's an ampersand or, like, the...
ROBERT SMITH: And.
MALONE: Like an and. And it basically means we're not going to put this person's rating in this book. Come talk to us. There's some stuff you should probably know about this person.
ROBERT SMITH: We had some questions about how the book worked in real life in Brooklyn back in the day, so we went to an expert, Josh Lauer. He wrote a book.
JOSH LAUER: My book is called "Creditworthy: A History Of Consumer Surveillance And Financial Identity In America."
MALONE: You went - you went for broke on that subtitle.
LAUER: I did.
ROBERT SMITH: Josh explained to us that credit in the early 1800s, it was not what we think of today. It wasn't credit cards or auto loans because, like, obviously those did not exist back then.
MALONE: What credit meant was a tab at your town store. So let's say that Robert Smith, you are a farmer and it's 1825. What crops are you...
ROBERT SMITH: Farm apples.
MALONE: Apples, OK. So Robert goes into the grocery store to pick up whatever he needs, maybe like some butter, some cigars. And Robert tells the grocer...
ROBERT SMITH: Yeah, I don't have any money. The apple crop hasn't come in yet. And so I'm going to need you to extend me some credit.
MALONE: And I, as the grocer, I look at Robert and I say, oh, Mr. Smith. Well, I know your uncle and I've known your father, and darn it if I don't trust the Smiths more than I trust myself.
LAUER: And he says, take your butter, take your cigars. I know you'll come back next week and you'll settle. And...
ROBERT SMITH: And good day, sir.
LAUER: And good day.
MALONE: And that system worked for a long time. But after the Civil War, people started moving around, heading to cities, especially Brooklyn, N.Y.
ROBERT SMITH: Give me a little sound effects from Brooklyn.
LAUER: How about this? Extra, extra, read all about it - population of Brooklyn booming.
MALONE: Love it.
ROBERT SMITH: Love it.
This created a problem. More strangers were showing up at the grocery store looking to buy things on credit, and the grocer needed to answer a pretty simple question - will this person pay me back? I know nothing about him.
MALONE: Enter the Cells (ph) brothers.
LAUER: Herman (ph) and Conrad (ph) Cells. And there isn't a lot of evidence that survives about them and about who they are.
ROBERT SMITH: So for the purposes of this story, we can imagine them however we like. You know, handlebar mustaches, blue velvet vests.
MALONE: Maybe some monocles, maybe pocket watches.
ROBERT SMITH: A jaunty cane.
MALONE: Cane - yes, yes. The Cellses were Mr. Peanutses.
ROBERT SMITH: They were two Mr. Peanuts.
MALONE: The Cells brothers were in Brooklyn in 1869. And they start going around to the butchers and the druggists and the tailors.
LAUER: And saying, we're organizing a list of all customers in our neighborhood.
MALONE: So it would be great, dear cobbler, if you would let me look at your books and find out who's in there, who pays cash, who uses credit, who pays back that credit. And that way if a stranger named Robert Smith walks into my store, I would just pull out the Cells book.
ROBERT SMITH: Oh, yeah, look right here - Robert Smith, plumber, 1102 Lafayette Avenue, B-A. Always pay in cash, always pay on time.
MALONE: Robert Smith.
ROBERT SMITH: Smith motto.
MALONE: Is that true?
ROBERT SMITH: That's - no. No.
The one thing that struck us when we looked at this little pamphlet is you could almost feel the Cells trying to be as careful as humanly possible to give the minimum amount of information. They're not judging people. They're not slandering them. They just put down the name, the job and a simple little rating.
MALONE: It was almost as if the Cells knew that if they were going to create an industry where people's information was the product that maybe, like, just maybe you should be careful with that information.
ROBERT SMITH: So we should note it says confidential on here.
Answers
GPT-4o mini
MALONE: Right! They understood the need for discretion, even back then.
ROBERT SMITH: Exactly. It's fascinating because this early attempt at credit reporting was less about profit and more about community trust.
MALONE: But as we know, that concept has evolved immensely over the years. The idea of keeping tabs on someone’s financial behavior transformed from a neighborhood initiative into a massive multi-billion dollar industry.
LAUER: That's right. The Cells brothers laid the groundwork for credit reporting as we know it today, and soon enough, larger companies would take that foundational idea and expand it on a much grander scale.
ROBERT SMITH: And with that expansion, of course, came the need to collect more data, leading to the centralized repositories like Equifax that we have now.
MALONE: The very notion that your personal data can be stored and potentially accessed by hackers, only amplifies concerns about privacy and security.
LAUER: Yes, and what’s alarming is that, unlike when the Cells brothers were operating, now consumers have little control over who can access their detailed information.
ROBERT SMITH: It’s like a stark reminder of the trade-off we make when we allow companies to aggregate our data in exchange for services.
MALONE: And that trade-off can have dire consequences, as we’ve seen with the Equifax breach.
ROBERT SMITH: It's the same old question, isn't it? How much trust are we placing in these institutions?
MALONE: They'll always need our information to function, but at what cost?
LAUER: And how can we ensure that our information, as a society, is handled with care?
ROBERT SMITH: Those are the very questions we should be tackling as we move further into this data-centric age of existence.
MALONE: So what started as a simple way of knowing who in the community could be trusted to pay their debts has turned into a high-stakes game where that trust can feel like it’s slowly draining away.
ROBERT SMITH: Coming up after the break, we'll delve deeper into how we can protect ourselves in this modern landscape. Stay with us!
(SOUNDBITE OF MUSIC)
ROBERT SMITH: Exactly. It's fascinating because this early attempt at credit reporting was less about profit and more about community trust.
MALONE: But as we know, that concept has evolved immensely over the years. The idea of keeping tabs on someone’s financial behavior transformed from a neighborhood initiative into a massive multi-billion dollar industry.
LAUER: That's right. The Cells brothers laid the groundwork for credit reporting as we know it today, and soon enough, larger companies would take that foundational idea and expand it on a much grander scale.
ROBERT SMITH: And with that expansion, of course, came the need to collect more data, leading to the centralized repositories like Equifax that we have now.
MALONE: The very notion that your personal data can be stored and potentially accessed by hackers, only amplifies concerns about privacy and security.
LAUER: Yes, and what’s alarming is that, unlike when the Cells brothers were operating, now consumers have little control over who can access their detailed information.
ROBERT SMITH: It’s like a stark reminder of the trade-off we make when we allow companies to aggregate our data in exchange for services.
MALONE: And that trade-off can have dire consequences, as we’ve seen with the Equifax breach.
ROBERT SMITH: It's the same old question, isn't it? How much trust are we placing in these institutions?
MALONE: They'll always need our information to function, but at what cost?
LAUER: And how can we ensure that our information, as a society, is handled with care?
ROBERT SMITH: Those are the very questions we should be tackling as we move further into this data-centric age of existence.
MALONE: So what started as a simple way of knowing who in the community could be trusted to pay their debts has turned into a high-stakes game where that trust can feel like it’s slowly draining away.
ROBERT SMITH: Coming up after the break, we'll delve deeper into how we can protect ourselves in this modern landscape. Stay with us!
(SOUNDBITE OF MUSIC)