FTC Warns 10 Data Brokers on Privacy Gaffes

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DAA says consumer groups ready to join in new effort.
DAA says consumer groups ready to join in new effort.

The Federal Trade Commission today reported that it had sent letters to 10 companies it identified as data brokers, warning that their practices might constitute consumer privacy violations under the Fair Credit Reporting Act. Such letters are not official notices of complaints being filed, but instead urge recipients to review whether their practices are in compliance with the law.

Questionable practices surfaced at the 10 companies during a test shopping review of 45 businesses by FTC staffers, who posed as individuals or business representatives seeking information about consumers related to creditworthiness, eligibility for insurance, or suitability for employment.

  • ConsumerBase and an unnamed company were warned for appearing to offer lists of consumers “pre-screened” for credit approvals.
  • Brokers Data and US Data Corporation were called out for seeming to promising information useful to making insurance decision on individuals.
  • Crimcheck.com, 4Nannies, U.S. Information Search, People Search Now, Case Breakers, and USA People Search were warned for appearing to offer consumer information for employment decisions.

The FTC issued the letters this week as part of its involvement in an international privacy sweep conducted by the Global Privacy Enforcement Network, which encourages cross-border enforcement of privacy laws by connecting privacy enforcement authorities.

In recent years the FTC has sued Equifax, Experian, and TransUnion—the three leading credit reporting agencies—and obtained nearly $3 million in civil penalties. The FTC also won a $15 million judgment against ChoicePoint for not screening prospective subscribers before selling them sensitive consumer information.

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