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FTC demands answers from data brokers

Published Dec 19th, 2012 1:05PM EST
FTC Data Brokerage

The United States Federal Trade Commission on Tuesday ordered nine data brokerage firms to provide the agency with information on how they collect and use consumer data. The FTC notes that these companies “collect personal information about consumers from a variety of public and non-public sources and resell the information to other companies,” and is now seeking answers. It wants to know how these companies use, maintain and disseminate the information they gather about consumers, and to the extent of which consumers are allowed to access and correct their information or opt out of having their personal information sold.

The nine data brokers ordered to provide the agency with information are Acxiom, Corelogic, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf and Recorded Future. While these companies may not sound familiar to the average consumer, they rake in a substantial amount of money by selling the data they collect. According to a recent article in The New York Times, the consumer data trade in the United States, which is largely unregulated, is a more than $2 billion-a-year industry.

An earlier report from the FTC revealed that while data brokers collect, maintain and sell a wealth of information about consumers, they often do not interact directly with users and instead get their information from public records or by purchasing information from other companies. These practices are done in the dark and consumers are often unaware of the existence of such firms, the agency said.

“This lack of transparency also means that even when data brokers offer consumers the ability to access their data, or provide other tools, many consumers do not know how to exercise this right,” the FTC wrote in its statement. “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.”

Reports are due by February 1, 2013, when the agency will “use the responses it receives to prepare a study and to make recommendations on whether, and how, the data broker industry could improve its privacy practices.”

Dan joins the BGR team as the Android Editor, covering all things relating to Google’s premiere operating system. His work has appeared on Fox News, Fox Business and Yahoo News, among other publications. When he isn’t testing the latest devices or apps, he can be found enjoying the sights and sounds of New York City.