The Consumer Financial Protection Bureau wants to know more about data brokers and their practices, as these entities gather and sell consumers’ personal and private information.
The CFPB requests public feedback including information about the entities that collect personal consumer data, the types of data collected, sources that data brokers use to collect information, their interactions with financial institutions and other businesses, and their impact or influence on consumer purchasing.
Generally, consumers do not willingly go into business with data brokers. These entities are just around, digitally tracking people, and then selling their personal data to others. As the CFPB describes:
“Data brokers collect or share a vast range of information, often building profiles of individuals by delving into the details of consumers’ everyday interactions, including credit card purchases and web browsing activity. Data brokers also collect other types of sensitive and intimate personal information such as genetic and health information, religious affiliation, financial records, and geolocation data.”
Among other things, the information collected is used in marketing and advertising, building algorithms, criminal background checks, fraud detection, and identity verification – as described in this Federal Trade Commission report.
Reckless or neglectful data brokers’ practices can cover a wide swath of security risks and consumer privacy violations, not to mention credit risks and personal financial harm.
While the Fair Credit Reporting Act, which regulates consumer reporting practices, has been around for more than forty years, the CFPB acknowledges that there is insufficient understanding of this era of data brokers, their technology and tactics. Meanwhile, consumers are unaware of the extent to which their personal information is collected and have little control of what data is used and how it is used.
The comment period closes June 13.