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​Private license plate scanners amassing vast databases open to highest bidders

Published time: March 06, 2014 01:58
Reuters / Seth Wenig

Reuters / Seth Wenig

Automated license plate readers used by car repo companies, for example, collect billions of personal records per year, which contribute to vast databases that can be used by law enforcement, insurance companies, banks, and the like, with few limits.

BetaBoston, working with the Boston Globe, detailed one Boston repo company’s data collection abilities, reporting that New England Associates Inc. can collect $200 to $400 for each vehicle found by an automated reader attached to an unmarked car. The company says it can typically add 8,000 license plate scans to its database in Texas each day.

Digital Recognition Network, which works with New England Associates, says it collects plate scans of 40 percent of all US vehicles per year.

According to the company’s own disclosures, Digital Recognition Network operates in conjunction with around 400 repossession outfits across the US, has increased tenfold its plate scans since September 2010, and adds 70 million scans a month.

The scanners use high-speed cameras and optical character recognition technology to scoop up 1,800 plates a minute, no matter the speed or driving conditions. The scanner also collects the date, time, and GPS location of each read, punctuating the privacy threats associated with plate scanning.

The legal scanners, which usually cost anywhere from $10,000 to $17,000, have few legal limits. For example, law enforcement – which have used the scanners for years – often have prohibitions on how long they can maintain the information gleaned, but private use is open season for those willing to subscribe for the information.

The top commercial use of the devices falls into the auto finance and auto repossession industries, which both work closely with major banks to track down those who default on loans. Digital Recognition claims its clients include Bank of America Corp., JPMorgan Chase & Co., HSBC Holdings, and Citibank.

Banks strongly encourage its repo contractors to use plate scanners, based on their efficiency in tracking down loan defaulters.

“The banks want it,” said Liran Cohen, owner of repo company Massachusetts Recovery Bureau. “All of them make a big deal out of it, since it gives them so much value.”

Yet with few limits, there is little, if any, accountability regarding where and how repossession companies use the scanners. Many companies that spoke to the Globe said they send spotter cars to commercial lots based on the amount of vehicles open for scanning.

Digital Recognition’s website lists “target environments” for repo agents, including “malls, movie theaters, sporting events, and numerous other locations.” The company also suggests repo agents trawl workplaces and commercial lots during the day and apartment complexes and residential areas at night.

Some commercial property owners call this practice trespassing.

“We’re unaware that this is happening, and we’re reaching out to our security teams and law enforcement contacts to get a better handle on it,” said Les Morris, spokesman for Simon Property Group, which owns at least one mall in the Boston area.

“If we saw scanning like this being done, we would throw them out,” said Issie Shait of New England Development, which owns the CambridgeSide Galleria and Bunker Hill Mall District.

Two repo companies said they target low-income housing areas, given the amount of yields collected in the past.

“This is just another example of stereotyping,” said Cambridge Housing Authority deputy executive director Michael Johnston. “But our lots are open, and we don’t have any gated communities in our system, so I don’t know how to prevent it.”

For its part, Digital Recognition said it cannot be blamed for how the scanners are used.

“We have nothing to do with the actual data collection process,” said Chris Metaxas, chief executive of Digital Recognition. “We provide technology to ¬repossession professionals.”

Over 60 Massachusetts police departments have adopted scanners since 2008. In December, the Boston police suspended plate scanner use after a Globe investigation found questionable data management – including the inadvertent public release of over 69,000 license plate numbers.

The private databases are of use to law enforcement. Digital Recognition offers its data to over 3,000 law enforcement agencies across the country, including the Massachusetts State Police.

This week, a Massachusetts state legislative committee held a hearing on a bill that seeks to ban license plate readers completely, with exceptions for law enforcement, toll collection, and parking regulation.

“We have technology rapidly moving ahead in terms of its ability to gather information about people,” said state Representative Jonathan Hecht, a co-sponsor of the bill. “We need to have a conversation about how to balance legitimate uses of this technology with protecting people’s legitimate expectation of privacy.”

The bill would require law enforcement agencies to scrub their plate data after 48 hours.

Citing the First Amendment, data brokers argue that the scanning pertains to license plates in public, which are available for anyone to record. In their opposition to the bill, they also say they do not disclose the plate’s owner, though their banking, insurance, and other clients can access the information.

The private companies also claim that inhibiting scanners would damage police efforts.

“I fear that the proposed legislation would essentially create a safe haven in the Commonwealth for certain types of criminals, it would reduce the safety of our officers, and it could ultimately result in lives lost,” said Brian Shockley, vice president of marketing at Vigilant, the corporate parent of Digital Recognition.

Privacy advocates say the data points gleaned by the scanners pose a highly intrusive risk to the public. For example, data brokers can translate plate numbers simply by accessing information from a state’s motor vehicle registry.

“Right now, it’s the wild West in terms of how companies can collect, process, and sell this kind of data,” said Kade Crockford of the American Civil Liberties Union of Massachusetts. “The best legal minds, best public policy thinkers, and ordinary people whose lives are affected need to sit down and think of meaningful ways we can regulate it.”