The Federal Trade Commission Tuesday announced that it has issued orders requiring nine data brokerage companies to provide the agency with information about how they collect and use data about consumers. Some of the companies provide skip tracing or scoring services to collection agencies.
The FTC noted in its press release that data brokers are companies that collect personal information about consumers from a variety of public and non-public sources and resell the information to other companies. The agency noted that this often benefits consumers (through fraud prevention, for example) and that it helps companies better target its marketing efforts.
But the FTC is concerned about a lack of transparency around the collection and use of consumer data. It notes that the information from the companies may be used to inform regulations. There are no current laws requiring data brokers to maintain the privacy of consumer data unless they use that data for credit, employment, insurance, housing, or other similar purposes.
Although skip tracing, credit decisioning, portfolio scoring, and other uses for large sets of consumer data used by ARM companies are already covered by those laws, most of the companies targeted in the information request provide some sort of service to the debt collection and buying industry.
The nine data brokers receiving orders from the FTC are:
5) ID Analytics,
8) Rapleaf, and
9) Recorded Future.
The FTC is seeking details about:
- 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.