Tag Archives: data broker

Congress Probes Leading Data Brokers on Dossiers

On Tuesday, the Congressional Privacy Caucus sent inquiry letters to nine of the largest data brokers regarding their privacy practices, including how they collect, analyze and sell consumer information.  Data brokers are organizations that compile data on consumers and sell that data to third parties for marketing and other purposes.  “By combining data from numerous offline and online sources, data brokers have developed hidden dossiers on almost every US consumer,” the letters said.  This practice is worrisome to privacy advocates and particularly the Federal Trade Commission (FTC), which has been candid in its statements and in its March report on consumer privacy, stating that the FTC intends to crack down on these unregulated data aggregators.  The settlement with Spokeo last month is reportedly the first with others to follow this year. The Privacy Caucus, co-chaired by Reps. Ed Markey (D-Mass.) and Joe Barton (R-Texas), seems to be weighing legislative action to demand oversight and industry accountability.  Companies receiving the letter were Axciom, Epsilon (Alliance Data Systems), Equifax, Experian, Harte-Hanks, Intelius, Fair Isaac, Markle and Meredith Corp.  The companies have until August 15 to respond.

Data Broker Spokeo to Pay $800,000 Under FTC Settlement

Online data broker Spokeo agreed to pay $800,000 to settle Federal Trade Commission (FTC) charges that it marketed information profiles on millions of consumers to companies that used them for employment screening, without taking necessary steps to protect consumers.  This misuse of data violated federal law, specifically the Fair Credit Reporting Act (FCRA), because Spokeo operated as a consumer reporting agency but it failed to disclose the source of its data or give consumers the chance to correct inaccurate information, among other things.  The conduct occurred between 2008 and 2010 when the company marketed the data on a subscription basis.  The settlement was announced by the FTC on June 12, 2012.

Spokeo is a data aggregator, merging personal information it collects about consumers from online and offline data sources to create detailed individual profiles of consumers.  A profile might include name, address, age range, email address, ethnicity, religion, photos, hobbies, and participation on social networking sites.  Spokeo describes itself as a “people search engine.”

This case is important because it’s the first FTC case to address the sale of Internet and social media data for employment screening.  The FTC also accused Spokeo of posting deceptive endorsements of their services on news and technology websites and blogs “portraying the endorsements as independent when in reality they were created by Spokeo’s own employees.”  These misleading endorsements violated the Federal Trade Commission Act.