The fun part of Eliot Spitzer's fall from grace is over. Now, in its wake, come the details of how he was brought down. The manner in which he was caught - it began with routine surveillance of his bank account - raises very real issues about the society we live in.

A friend sent me an e-mail link on the subject, with a one-word subject line: "Horror". It led to a story about how the banks use software to catch money-launderers and those who fund terrorism.

A few years ago, as you will know, the world decided that its relatively laissez-faire attitude to money-laundering needed stepping up, to deal with the funding of terrorism. You may have been asked to identify yourself to your bank locally, even if you'd been a customer for 60 years and had only 27 cents in your account.

If it helped to catch dangerous criminals, that was a minor inconvenience, and not one to which objections could be raised. Identifying yourself to the bank took you off the list of possible bad guys. It is on that list that Mr. Spitzer found himself, because, it seems, he was doing something he should not have. The system, in his case, worked.

The rest of us, the innocent, have been carried along with the wave of drug dealers, terrorists and corrupt politicians and are all now considered potential villains.

The best source of information on all of us is our bank account details (I should say that this is not specifically about Bermuda banks, although one expects, and is reasonably certain, that the Bermuda banks would be as up-to-the-minute in their crime detection techniques as anyone).

"Experts say that all major banks, and even most small ones, are running so-called anti-money-laundering software, which combs through as many as 50 million transactions a day looking for anything out of the ordinary," the article by John Borland said.

The banks' systems analyse customer transactions in a process known as "data mining". What they are looking for is "anomalies that trigger heightened scrutiny". Mr. Spitzer reportedly created a series of transactions to hide his real intent; his bank's analysis spotted the unusual nature of these transactions; down he went.

"Banks are constantly on the lookout for activity that seems to be an effort to break up large, clearly suspicious transactions into smaller ones that might fly under the radar, a practice called structuring," Borland wrote.

"But software packages also group customers and accounts into related 'profiles' or 'peer groups', in order to establish more-general behavioural baselines," he continued. "Some software might group together all personal checking accounts with an average balance of less than $15,000, or merchant accounts with turnover of less than $100,000 per month. Some might go deeper, grouping together all business accounts specifically tied to dry cleaners or consulting firms.

"The most sophisticated software packages can sort people or accounts into several categories at once: a single customer might be compared to other schoolteachers; to people who bank mostly at a single regional branch; and to people who have stable, pension-based monthly incomes, for example.

"Each category is analysed to determine patterns of ordinary behaviour. Every single transaction by customers in these groups, and even patterns of transactions stretching back as far as a year, are then scrutinised for evidence of deviation from this norm using measures such as the number, size or frequency of transactions, among others," Borland wrote.

The question is: how scary is this? The banks, no doubt, would argue that the software is non-intrusive. The argument forever trotted out by those who chip away at what used to be called personal freedom is: "The innocent have nothing to be afraid of".

The bank software is merely one of an armoury of techniques and devices being used, ostensibly, to fight and prevent crime. With that, no one can argue. I want bad guys caught, if possible before they do great damage. If villains such as Mr. Spitzer are incapable of greater sophistication than making a series of small transactions out of one big one, let 'em fry, I say.

What is always wrong with all this vigilance, which is exactly what the innocent have to be afraid of, is that it is based in the presumption of guilt. If I'm innocent, leave me alone. If I am innocent, you are wasting time and money checking me (cf airport security). If I am innocent, do not take away my rights. Freedom is indivisible. Your tiny inroad into my personal space later becomes a freeway for others with darker ambitions.

What makes the whole thing a nonsense, of course, is the second, unregulated world that works alongside the system we all use, in which cash is the only currency. Terrorism is mostly funded through that unregulated word. So what we have left is the global authorities chasing you and me and some unsophisticated drug dealers, on the basis that someone in that group is guilty.

The fight for personal freedom is, of course, lost. Larry Ellison, CEO of Oracle said exactly that two years ago. Privacy, he said, is a thing of the past.

One bank's system, I know, works very well. In London this week, I did some drunken-sailor spending. I bought a bed and a mattress, and then my card froze and I could not access my money, which I had paid into the card in advance because I knew the drunken sailor would take charge the moment the fleet hit town.

Buying beds in London is certainly unusual economic behaviour for me - the last time was in 1973, before I'd even heard of Bermuda. Since buying beds with your savings could hardly be construed as terrorist activity, the bank acted purely to defend itself and switched my card off.

The bank did call me to ask if I was buying beds in London, but the call went to my home in Bermuda, which I had rented out to an insurance company CEO for the two weeks I would be away, for $90,000 a week (I told him it was a steal, so no lying was involved).

An e-mail to my friendly bank support team solved the problem, but here is something I learned that might be useful: if you're going away with your credit card, best to tell the bank in advance, or like me, you may find your plans stymied. Your card is good for only two purchases of any size before you are cut off like the criminal you are not.

We live in a brave new world, one in which the cowards who try to destroy the system have spoiled it for everyone else. Given that excuse, the military-industrial complex has exploited an opportunity to take greater control of the civilian population. This has been an ongoing process for many years in the major economies, and will only worsen as time goes by.

Even in Hamilton, cameras now routinely monitor activities in which no criminal behaviour is suspected. Your financial life is an open book to the authorities, and there is no more succinct and simple-to-read story than the one left behind by your financial affairs. That is why the bad guys use cash.

What is wrong is penalising the innocent citizen who prefers to use cash. Even that is hard to do these days: unusual purchases, in cash or otherwise, create a suspicious activity report that is sent directly to the crime fighters, as Mr. Spitzer now knows.

All this has happened more quickly than one could have imagined, and is gathering speed. The concept of personal freedom has been abandoned. Big Brother is truly watching us.