As a follow-up to a previous PRG post from a couple of months ago (http://blogs.law.nyu.edu/privacyresearchgroup/2012/10/you-know-what-id-like-to-learn-whats-being-collected-about-me-too/), the FTC is now also investigating the role that data brokers play in the collection, use, sale and sharing of personal consumer information. Specifically, the FTC is asking Acxiom, Corelogic, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf, and Recorded Future the following questions (http://www.ftc.gov/opa/2012/12/databrokers.shtm, http://www.ftc.gov/os/2012/12/121218databrokerssection6border.pdf):
- the nature and sources of the consumer information the data brokers collect;
- how they use, maintain, and disseminate the information; and
- the extent to which the data brokers allow consumers to access and correct their information or to opt out of having their personal information sold.
Hopefully the answers are honest and complete.
In related news, the Consumer Financial Protection Bureau issued this recent paper describing in great detail the means by which credit bureaus obtain consumer financial information: http://files.consumerfinance.gov/f/201212_cfpb_credit-reporting-white-paper.pdf.
- the top three credit bureaus (Equifax, Experion, Trans Union) collectively maintain records on over 200 million individuals
- the average credit report includes 13 line items (bank accounts, credit cards, loans, etc)
- the bureaus receive, on average, 1.3 billion updates to consumer reports from 10,000 different data providers per month
- of the estimated 40 million people who obtained copies of their credit reports, 8 million people contacted the bureaus regarding errors. That’s a 20% error rate!
- a separate report by the Policy and Economic Research Council found a similar error rate of 19% (n=2338)
- importantly, though, only about half of these errors would have affected a consumer’s credit score, and only about 2% were found to affect a credit score by 10 or more points.
- about 40% of the complaints relate to debt collection errors
- changes to credit scores are nonlinear. That is, the greater is one’s credit score, the more will negative credit information affect one’s score. E.g. the reduction in one’s credit score due to a 30 day delinquency to a credit card will reduce a consumer with a 780 fico score by 110-90 points, whereas it will only reduce by 80-60 points a consumer with a fico score of 680.
More information about FTC workshops: