Abandoning the proposed rules leaves consumers vulnerable to fraud and without protection to ensure data collected and sold about them is accurate
WASHINGTON DC – The Consumer Financial Protection Bureau’s decision to rescind a proposed rule that aimed to limit the sale and misuse of personal identifying information that data brokers collect about Americans will leave consumers vulnerable to scams and identity theft according to Consumer Reports, which supported the proposal. Data brokers that sell financial records about people would have been subject to the Fair Credit Reporting Act’s transparency and accuracy requirements under the proposal and could only sell that data for legitimate purposes, such as a loan approval.
“Data brokers collect a treasure trove of sensitive information about virtually every American and sell that information widely, including to scammers looking to rip off consumers,” said Matt Schwartz, policy analyst at Consumer Reports. “Dropping these proposed limits will leave consumers unprotected and make it more likely that sensitive information like their Social Security numbers will wind up in the hands of crooks. This decision is just the latest troubling move by this administration to abandon the CFPB’s critical mission to protect consumers.”
Data brokers assemble a wide variety of sensitive information about people such as credit card purchases, web browsing history, genetic and health data, military status, religious affiliation, and financial records. Data brokers use AI-powered tools to develop consumer profiles based on this information which are then sold to other companies, usually without consumers’ knowledge, and can be used to set prices, determine eligibility, and make other consequential decisions that impact our lives.
“The detailed profiles data brokers compile and sell about all of us are critical to our financial lives and can ultimately determine whether we are hired for a job, get an affordable rate on a loan, or even lease an apartment,” said Schwartz. “The CFPB’s proposed rule would have given consumers the right to access their information and dispute errors just like they can do with credit reporting agencies. Now that the CFPB has withdrawn the proposal, consumers will remain in the dark about the information that is being compiled and sold about them and have no way of ensuring it is fair and accurate.”
Media contact: Michael McCauley, michael.mccauley@consumer.org