Police and federal agents have access to huge quantities of private data on citizens who aren't accused of committing any crimes.

Police and federal agents increasingly have access to huge quantities of commercial, banking and other private data on citizens not suspected of having committed any crimes. Examples of police abuse of data systems are plentiful and growing. For the purpose of simplicity, we can break down the different kinds of databases into two main categories: government and commercial. As you'll see, there are many ways in which government and commercial databases bleed into one another, most notably, that government agencies routinely buy access to commercial databases like Choicepoint and BlueKai. In some cases, the line between government and commercial data brokers completely evaporates, as is the case for In-Q-Tel, a branch of the CIA that invests heavily in data mining and data broker corporations.

First, let's take a look at some of the government databases. There are many different kinds of government databases, including criminal databases and non-criminal databases.

One example of a non-criminal government database in Washington state contains the license plate numbers and locations of cars picked up by the state police's "Automated License Plate Recognition" (ALPR) system. The ACLU of Washington has investigated how these systems are being used. What they have found is profoundly disturbing, and highlights what is at the heart of the problem with unchecked data gathering. ACLU of Washington's Brian Alseth estimates that police in that state are collecting location information on millions of license plates per year. He writes:

ALPRs raise serious concerns to your privacy because of the system's ability to monitor and track the movements of ALL vehicles, including those registered to people who are not suspected of any crime. Without restrictions, law enforcement agencies can and do store the data gathered by the license plate readers forever, allowing them to monitor where you have traveled and when you traveled there over an extended period of time. In fact, a key selling point for ALPR vendors is the system’s ability to track drivers. As explained by the Los Angeles Police Department Chief of Detectives, the “real value” of the ALPR “comes from the long-term investigative uses of being able to track vehicles where they’ve been and what they’ve been doing.”  In other words, the cops want to data mine your driving habits.

In other words, junk into the system results in junking the system. Plenty of Americans have born the brunt of this data-system-gone-wild. But it isn't just inaccurate information that puts us at risk; the very existence of these data bases containing nearly complete dossiers on most Americans endangers us. Identity thieves and other criminals regularly steal personally identifiable and credit related information from massive corporate data brokers, putting millions of people at risk every year. There's even an entire website dedicated to monitoring these security data breaches.

Part of the problem is that the corporate data behemoths are allowed to operate with hardly any regulatory oversight from the government. That has allowed for a system in which companies like Acxiom are allowed to buy and sell unbelievably detailed information about everyone, with hardly any restrictions.
http://privacysos.org/databaseinfo