Data brokers under FTC microscope

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The Federal Trade Commission said this week it is investigating nine companies known as data brokers regarding their use of consumer information for profit without consumers' knowledge or consent.

The FTC issued orders requiring these companies to provide information about their methods of collection and use of data about consumers. The agency will use the information to study privacy practices in the data broker industry.

Data brokers collect personal information about consumers from a variety of public and non-public sources, and resell the information to other companies. Some of the reasons for doing so are legitimate such as preventing fraud, but they also provide data to businesses for marketing purposes and this is what the FTC is questioning.

The nine data brokers receiving orders from the FTC are: Acxiom, Corelogic, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf, and Recorded Future.

The FTC wants to know the nature and sources of the consumer information the data brokers collect, and how they use, maintain, and disseminate the information. The commission also wants to know 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.

In March, the FTC issued a report urging the data broker industry to improve the transparency of its practices. The report, "Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers," "set forth a voluntary framework of best practices for businesses based on the concepts of privacy by design, consumer control, and increased transparency for the collection and use of consumer data."

The report found that while data brokers collect, maintain, and sell a wealth of information about consumers, they often do not interact directly with consumers, the FTC said. "As a result, consumers are often unaware of the existence of data brokers as well as the purposes for which they collect and use consumers' data," it added.

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. 

For more:
- see the FTC order

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