FTC calls out data brokers on privacy
Information is money. And data brokers, companies that mine consumers' personal information and sell to the highest bidder, know this more than anyone. Their practices in collecting said data, however, have recently come under fire. The Federal Trade Commission has repeatedly expressed concern over data brokers' lack of transparency and accountability, even when it comes to mining consumer health information.
The May 2014 report released by the FTC, which closely examined the practices of nine data brokers, revealed some troubling findings. Among them: most consumers are not aware these data brokers are collecting their data. How much data? Just one of the data brokers examined in the report, Acxiom, had more than 3,000 data segments for nearly every U.S. consumer. What's more is that these data brokers are not liable under HIPAA, report authors point out.
"You may not know them, but data brokers know you," said FTC Chairwoman Edith Ramirez in her opening remarks on the report. "They know where you live, what you buy, your income, your ethnicity, how old your kids are, your health conditions, and your interests and hobbies."
Among the health data these companies can collect on consumers are over the counter drug purchases; whether the individual purchased disability insurance; purchase history or interest in various health topics like medicine preferences and diabetes care; ailment and prescription online searches.
Because of this mining without the knowledge of most consumers, FTC has urged Congress to make some big changes.
"To close these gaps, I urge Congress to consider legislation provisions – in addition to the provisions recommended by the Commission – that would create greater accountability for data supplies, data brokers and data broker clients," wrote FTC Commissioner Julie Brill in a May 27 statement to Congress.
One of the recommendations included requiring data brokers to obtain "appropriate consent" from consumers to collect certain pieces of data. The approach is "entirely appropriate," continued Brill, "because sources often share with data brokers information about consumers, including sensitive information, outside the context in which consumers provide the information."
The following information is taken from the FTC report on the nine data brokers included:
The Little Rock, Ark.-based company offers data analytics for marketing campaigns and fraud detection. Acxiom's databases include information on some 700 million consumers globally, with over 3,000 data segments for nearly every U.S. consumer.
The Irvine, Calif.-based data analytic service company offers solutions to businesses and government based primarily on property information, as well as consumer and financial information. Its databases contain more than 795 million historical property transactions, over 93 million mortgage applications, and property-specific data covering over ninety-nine percent of U.S. residential properties, in total exceeding 147 million records.
Datalogix provides businesses with marketing data on almost every U.S. household and more than $1 trillion in consumer transactions. In September 2012, Facebook inked a partnership with Datalogix to measure how often Facebook's one billion users see a product advertised on the social site and then complete the purchase in a brick and mortar retail store.
eBureau provides predictive scoring and analytics services for marketers, financial services companies, online retailers, and others. eBureau primarily offers products that predict whether someone is likely to become a profitable customer or whether a transaction is likely to conclude in fraud. It provides clients with information drawn from billions of consumer records, adding over three billion new records each month.
ID Analytics provides analytics services designed principally to verify people's identities or to determine whether a transaction is likely fraudulent. The ID Analytics network includes hundreds of billions of aggregated data points, 1.1 billion unique identity elements, and it covers 1.4 billion consumer transactions.
Intelius provides businesses and consumers with background check and public record information. Its databases contain more than twenty billion records.
PeekYou has patented technology that analyzes content from over sixty social media sites, news sources, homepages, and blog platforms to provide clients with detailed consumer profiles.
Rapleaf is a data aggregator with at least one data point associated with over 80 percent of all U.S. consumer email addresses. Rapleaf supplements email lists with the email address owner's age, gender, marital status and thirty other data points.
Recorded Future captures historical data on consumers and companies across the Internet and uses that information to predict the future behavior of those consumers and companies. As of May 2014, Recorded Future had access to information from over 502,591 different open Internet sites.