WASHINGTON May 27 Companies known as data
brokers collect and sell information about "nearly all" U.S.
consumers, drawing potentially harmful conclusions about them
largely without their knowledge, U.S. regulators said on
The Federal Trade Commission called on Congress to pass
legislation that would enable consumers to learn more easily how
data brokers collect, use and sell their data, to correct it or
to opt out of the process, especially when it comes to sensitive
information such as about their health status.
The commission's report relied on information shared by nine
data broker companies, which do not interact directly with
consumers but collect data to inform other companies' marketing
efforts, to verify consumers' identity or to detect fraud.
The companies were Acxiom Crop, Corelogic Inc
, Datalogix, eBureau, ID Analytics, Intelius, PeekYou,
Rapleaf, and Recorded Future.
"You may not know them, but data brokers know you. 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," said FTC Chairwoman Edith Ramirez.
"This is an industry that operates in the dark... The sheer
magnitude of what's taking place I think is quite astonishing."
The review did not find illegal activity from the brokers
but raised concerns about the scope of collection, the way
brokers segment consumers into broad racial, socio-economic and
even political categories, and how those "troubling
classifications" could harm consumers.
The FTC found that data brokers collect and sell - to
advertisers and each other - billions of data points about
nearly every U.S. consumer, gathered through retailers, social
media, Census figures, magazine subscriptions and other sources.
Through this vast trove, consumers are classified by race,
income, age, health conditions and other categories like
"financially challenged," which include single parents; "rural
everlasting," which are single people over the age of 66 with
"low education attainment and low net worth"; or "urban
scramblers," which include a high concentration of low-income
Latinos and African Americans.
While such data can help advertisers better target potential
buyers, it could also prompt discrimination by directing some
consumers to inferior customer service or offering different
prices for the same goods, the FTC said.
For instance, such categories could lead to some consumers
seeing ads for subprime loans while others see ads for credit
cards, or insurance companies could use marketing categories
like "bike enthusiast" or "diabetes interest" to screen
To read the report, click here: 1.usa.gov/1kbUkcF
Democratic U.S. Senators Jay Rockefeller of West Virginia
and Edward Markey of Massachusetts in February introduced a bill
that seeks to give consumers more control over data collection.
Ramirez said the FTC would work with Rockefeller and others
to pass legislation on brokers' transparency, long urged by
consumer advocates but resisted by data-driven industries that
oppose new regulations and legal requirements.
(Editing by Ros Krasny and Eric Walsh)