FTC Demands Data Brokers Reveal Methods

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Private data collection

Source: web

This week, the Federal Trade Commission announced it is requiring nine companies – potentially more later on – that collect personal data about consumers to tell the tale on how they first gather that information and then how they use it. It says it will use that information as part of a bigger study on how the industry incorporates its privacy practices.

The nine companies so far include:

Acxiom, Corelogic, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf and Recorded Future.

As part of its requirement, the government agency said it’s specifically looking for how the companies collect the information and where they get that information; how they use it, secure it and distribute it; whether or not they allow consumers to see the information or if they’re even made aware of its existence; whether or not those consumers are allowed to correct information that’s not right and whether or not they have any kind of say on how it’s distributed from that point on.

It’s no secret that a number of avenues are routinely traveled in search of this kind of information from these types of companies gather information about consumers from a variety of public and nonpublic sources. From court records to receipts, the FTC says nothing’s off limits and that’s the problem.

“They are always collecting information,” says Paul Stephens, director of policy and advocacy at the nonprofit Privacy Rights Clearinghouse. He says there are always eyes watching,

when you’re online, or perhaps when you visit a store, or when you take your car for servicing. Any situation where you are giving out personal information, data is being collected about you.

If it sounds alarming, it should. The fact that there’s no oversight, as evidenced by this latest effort to find out once and for all exactly how the information is collected and from where is evidence that these companies have played by their own rules. Are they out to steal your credit card information and go on a fraudulent shopping spree? Of course not – but it can feel pretty invasive if you think about it.

Ever dealt with a collection agency? Ever wondered how it got its hands on certain information? Could have been as innocent as giving your information to your florist when you sent flowers to your best friend last year while she was in the hospital. The florist isn’t being irresponsible, it’s just that these companies know what to do in order to capture that kind of information. Worse, it’s what happens after it’s been captured. It’s sold many times, as a matter of fact.

Not only that, but one company that’s been called out, Corelogic, said it knows it has put information on 99.9 percent of the U.S. population. That’s dangerous because no single company does business with virtually every American consumer. There’s something that doesn’t add up and this is what FTC hopes to uncover. It noted, too, that consumers are often unaware that companies keep this information. Even when consumers are allowed to see the data that have been collected on them, they’re often unsure how to access it, retrieve it, prevent the company from doing anything to it or even verify it.

There are laws, but it appears all stop short of making a dent in these types of efforts. For instance, the Fair Credit Reporting Act only requires consumer information to remain private if it’s related to credit, employment, insurance, housing or other similar purposes. It doesn’t play a role in how information is gained and used for marketing purposes.

The Consumer Financial Protection Bureau could step up to the plate, as well with its own efforts. Judging by the mountains it’s moved in this sector of the economy in less than two years, this is definitely a formidable force to be reckoned with. In fact, one of the specific objectives of the relatively new agency includes this detail:

The Research Office will be charged with identifying and collecting important data about consumer financial markets of interest to the public to inform decision making among businesses, consumers, and regulators. For instance, knowledge of how banks charged unfair or unnecessary service fees, such as those for overdrawn accounts, led to new rules about how banks inform their customers about overdraft protection programs and…the kind of information collected and… the kinds of fees banks can charge. With more information about those practices, businesses and consumers will be able to make smarter decisions and regulators will be able to respond with appropriate consumer protection measures similar to those on overdraft fees.

There was no word on any kind of deadline these nine companies would have comply to the requests, though it’s not likely it will happen until after the new year.

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About Author

Casey is a seasoned writer in personal finance. He has written a number of articles that have been published in magazines and blogs around the country. His advice has helped millions make better choices about how they save their money.


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