The Federal Trade Commission has warned ten data broker companies that their practices may violate the Fair Credit Reporting Act after a secret-shopping operation revealed that the companies were willing to sell consumer data without verifying consumer identities as required by law.
The letters were warnings; they did not initiate any legal action against the data brokers.
“Instead, they serve to remind the companies to evaluate their practices to determine whether they are consumer reporting agencies, and if so, how to comply with that law,” the FTC said in a press release.
Data brokers compile detailed profiles of consumers by name, gleaning information from customer loyalty programs, auto loans and online activities, for example.
The companies appeared willing to sell would-be buyers, who were actually FTC staffers, for employment purposes for to evaluate consumers before providing insurance credit.
In order to collect, distribute or sell these protected forms of data, companies must conduct additional verification processes to ensure that the information is accurate about the person in question. The companies cited by the FTC appeared willing to sell the information without complying with these requirements.
None of the companies cited were those with which Facebook has contracted to deliver sophisticated ad targeting for users of its platform. They were: ConsumerBase, Brokers Data, US Data Corporation, Crimcheck.com, 4Nannies, U.S. Information Search, People Search Now, Case Breakers and USA People Search.