The FTC’s Data Broker Report: What does it mean for you?

The data broker industry has been on the Privacy Rights Clearinghouse’s (PRC) radar for over a decade, and we continue to receive questions and complaints about data brokers almost every day. Lawmakers, regulators, and media have focused more attention on the industry in recent years, but it is still difficult for individuals to understand what is going on and why they are unable to exercise any meaningful control over their information.

On May 27, 2014, the Federal Trade Commission (FTC) released a report titled “Data Brokers: A Call for Transparency and Accountability.”  The report is the result of an FTC study of nine data brokers offering people-search, marketing, and/or risk mitigation products.  It explains how particular data brokers operate, lays out risks and benefits they pose to individuals, and asks Congress to consider legislative solutions. 

The report touches on some consumer concerns that we hear on a regular basis.

  • Individuals often contact us when they encounter people-search websites that offer information about them for free or a price.  Their reasons vary, but most want the option to opt out of the information being disclosed online for anyone to see.
  • Individuals complain to us when their information is mixed up with someone else’s and prevents them from completing a transaction or accessing an account. When this happens, people often don’t understand that a data broker provides the information behind the scenes, who that data broker is, where the information comes from, or how they can fix inaccuracies.
  • We also receive questions and complaints when companies interact with individuals in a manner that the individual didn’t expect or request.  This may be online, offline, or both.   

In other words, this industry is virtually invisible to consumers, yet it has the potential to significantly impact their lives.

The FTC’s report does a great job of shedding light on data broker industry operations.  It also makes legislative recommendations regarding data broker transparency, consumer choice, and access to an individual’s own information.  

The report has shortcomings however. We believe the FTC should have made recommendations based on the full set of privacy principles that form the basis of strong privacy laws and policies, called the Fair Information Principles (FIPs). For instance, we continue to be very concerned with the amount and potential sensitive nature of data collected, the length of time it is retained, its downstream uses, and the strength of security practices surrounding it.   

Nevertheless, the report adds much-needed information to the data broker discussion, and we hope to see the FTC’s continued investigation of this industry and its impact on individuals.

Your questions and complaints to us are very important in shedding light on how you experience the data broker industry. Please continue to send us your observations, questions and complaints about data brokers.