Having worked on that side of the red tape, it's really nothing like that at all. Identity theft is a rapidly growing 'industry', and has cost people everything if allowed to go on too long. The pigeonholes aren't artificial and arbitrary, they're based entirely on our existing spending habits. When the 60 year old grandmother who hasn't used her credit card for anything but gas and groceries for the past five years suddenly buys a plasma TV and an iPhone, it sets off alarms.

And if your financial institution is any good, they try to resolve it asap. Some time back I used my bosses credit card (with her permission) to buy movie tickets for our whole team (22 people). Five minutes after the charge, she got a call from the customer service people for her card, asking her if she was aware of the charge. You may find that intrusive, but given how easy it is to just snatch up somebody's debit card and go to town with it, I find it reassuring.