This is a revelation. Relevant to all of you readers because they all are affected by both the Fair Credit Reporting Act and Equal Credit Opportunity Act Disclosures.
Data Brokers
A Call for Transparency and Accountability
EXECUTIVE SUMMARY
In today’s economy, Big Data is big business. Data brokers—companies that collect consumers’ personal
information and resell or share that information with others—are important participants in this Big Data
economy.
In this report, the Federal Trade Commission (“FTC” or “Commission”) discusses the results of an in-
depth study of nine data brokers. These data brokers collect personal information about consumers from
a wide range of sources and provide it for a variety of purposes, including verifying an individual’s identity,
marketing products, and detecting fraud. Because these companies generally never interact with consumers,
consumers are often unaware of their existence, much less the variety of practices in which they engage. By
reporting on the data collection and use practices of these nine data brokers, which represent a cross-section
of the industry, this report attempts to shed light on the data broker industry and its practices.
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For decades, policymakers have expressed concerns about the lack of transparency of companies that
buy and sell consumer data without direct consumer interaction. Indeed, the lack of transparency among
companies providing consumer data for credit and other eligibility determinations led to the adoption of
the Fair Credit Reporting Act (“FCRA”), a statute the Commission has enforced since its enactment in
1970. The FCRA covers the provision of consumer data by consumer reporting agencies where it is used
or expected to be used for decisions about credit, employment, insurance, housing, and similar eligibility
determinations; it generally does not cover the sale of consumer data for marketing and other purposes.
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While the Commission has vigorously enforced the FCRAMost recently, in its 2012 report Protecting Consumer Privacy in an Era of Rapid Change:
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Recommendations for Businesses and Policymakers (“Privacy Report”),2 the Commission specifically
addressed the subject of data brokers. The Commission described three different categories of data brokers:
(1) entities subject to the FCRA; (2) entities that maintain data for marketing purposes; and (3) non-FCRA
covered entities that maintain data for non-marketing purposes that fall outside of the FCRA, such as to
detect fraud or locate people.3 The Commission noted that, while the FCRA addresses a number of critical
transparency issues associated with companies that sell data for credit, employment, and insurance purposes,
data brokers within the other two categories remain opaque. In the report, the Commission recommended, that fall outside the FCRA.
addressed the subject of data brokers. The Commission described three different categories of data brokers:
(1) entities subject to the FCRA; (2) entities that maintain data for marketing purposes; and (3) non-FCRA
covered entities that maintain data for non-marketing purposes that fall outside of the FCRA, such as to
detect fraud or locate people.3 The Commission noted that, while the FCRA addresses a number of critical
transparency issues associated with companies that sell data for credit, employment, and insurance purposes,
data brokers within the other two categories remain opaque. In the report, the Commission recommended, that fall outside the FCRA.
[…]
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