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Consumer Reports praises CFPB for its plans to rein in abusive data broker practices

CFPB is developing proposed rules that would subject data brokers to the Fair Credit Reporting Act 

WASHINGTON, D.C. – Consumer Reports applauded the Consumer Financial Protection Bureau (CFPB) for announcing its plans to develop new rules that would subject data brokers to the same accuracy and transparency requirements that credit reporting agencies must follow under the Fair Credit Reporting Act. Data brokers assemble detailed profiles of people similar to those developed by credit reporting agencies and sell that sensitive information to other companies, but are not currently required to abide by the same legal standards that aim to prevent abuse and misuse of that data.

“Data brokers routinely sell our sensitive information to companies that use it to make decisions about us that can affect whether we are hired for a job, qualify for a loan or get offered a lease on an apartment,” said Jennifer Chien, senior policy counsel on financial fairness for Consumer Reports. “It is high time that data brokers are required to abide by strong rules to prevent abuse and misuse of the treasure trove of sensitive information they have amassed on all of us. We are pleased that the CFPB is planning new rules to extend the protections of the Fair Credit Reporting Act to data brokers so that the information they collect and sell about us is accurate and not misused.”

The rules under consideration by the CFPB would categorize a data broker as a “consumer reporting agency” if the data broker sold information for purposes covered under the Fair Credit Reporting Act. The rules would also clarify whether “credit header data,” such as name, date of birth, and Social Security number, is considered a consumer report which would close loopholes used by data brokers to impermissibly disclose a person’s sensitive information.

Consumer Reports maintains that since data brokers are engaging in the same business practices as consumer reporting agencies, they should also be subject to the same accuracy and transparency standards that allow consumers to access their information and dispute errors. Modern surveillance technology and AI allows massive amounts of data to be collected and processed for critical decisions that impact opportunities for employment, housing, and loans, underscoring the need to protect peoples’ privacy and the use of their sensitive information.

Earlier this year, Consumer Reports responded to the CFPB’s request for information on data brokers with consumer stories that highlighted incorrect data being linked to a consumer’s profile, difficulty removing data from a data broker’s repository, unsuccessful attempts to opt out of collection practices, and harms associated with collection and dissemination that lead to spam, identify theft, fraud, and scams. Consumer Reports urged the CFPB to implement stricter controls on what personal data is collected by data brokers, safeguards on how that data is analyzed and used, and restrictions on how data is shared and sold.

Michael McCauley, michael.mccauley@consumer.org