A chilling report issued by the Federal Trade Commission details the privacy abuses committed on a daily basis by data brokers who collect thousands of data points they use to create detailed profiles of individual Americans. These privacy abuses are a contributing factor to an identity theft epidemic.
FTC commissioner Julie Brill urged Congress to act in 2014, but so far a bill that would require a centralized portal for consumers who want to know what information data brokers collect about them has remained stalled. Brill says, “Consumers can’t manage this process by themselves. It’s too big. It’s too complex. There are too many moving parts.”
How big and complex is the problem of ID theft fueled by information collected by data brokers? Brill says that the FTC report provides a detailed account of a system of commercial surveillance that draws on government records, shopping habits, and social media postings. “This is a multi-billion dollar industry that is creating intimate profiles that would unnerve some consumers who have little ability to track what’s being collected or how it’s used,” Brill said. “It’s even difficult to correct false information.”
The consumer profiles compiled on Americans by the data brokers include traditional demographic details such as age, race and income, as well as political leanings, religious affiliations, Social Security numbers, gun-ownership records, favored movie genres and gambling preferences. A person’s health issues such as diabetes, HIV infection and depression can also be tracked by the data brokers.
All of this information is a treasure trove for identity theft. Organized criminals or opportunistic identity thieves working alone can use the information to gain access to your checking account to drain your balances, and obtain credit cards or run up huge medical bills in your name. There are even instances where an identity thief arrested for something other than ID theft has used a victim’s name, leaving them with a criminal record.
The data brokers sell reports to marketers (and individuals) that can contain thousands of fields. According to the FTC report, the basic product sold by a data broker is a list of consumer profiles broken into categories such as “Bible Lifestyle,” “Affluent Baby Boomer” or “Biker/Hell’s Angels” the report said.
Reports can be very specific, such as one that tracks buyers of “Novelty Elvis” items. Most, however, are broader, such as one called “Rural Everlasting” that profiles older people with “low educational attainment and low net worth.”
Why does it matter if a data broker labels you as an “Affluent Baby Boomer” or “Novelty Elvis” fan? Because the reports are often used by banks and credit card companies who determine what kind of offer to send you – get on a list of affluent consumers, and you may get offered low-interest credit cards, but if you’re on the list of deadbeats or low-income consumers (even if the information is wrong), you may find it hard to get any credit card at all, or wind up paying much higher interest on a car purchase or other loan.
But it isn’t just financial fraud that damages a victim’s credit worthiness that can be affected by the information sold by the data brokers. The FTC expressed concern about potential abuses such as the ability to get a job, rent an apartment, or even how long they wait on hold when they call a company with a complaint. (Some customers receive speedy, responsive service, while others don’t – and it’s the data broker profiles that can make the difference.)
It’s More than Online Behavior
Data-broker firms typically have no direct dealings with the public, relying on third-party sources or trading information with one another. Seven of the nine companies subpoenaed by the FTC (Acxiom, CoreLogic, Datalogix, eBureau, ID Analytics, Intelius, PeekYou, Rapleaf and Recorded Future), share information with one another. This means that mistakes in one database are likely repeated in others.
Consumers also need to understand that the data brokers are connecting online and offline behavior. A process called “onboarding” allows the brokers to load offline information — from magazine subscriptions, store loyalty cards or government records — into cookies that digital advertisers use to target consumers for pitches. Cookies, which are a small bit of computerized code stored in a computer’s Web browser, allow advertisers to feature a single product across many Internet services.
The issue of data collection has generated increasing attention in recent years — and especially since former National Security Agency contractor Edward Snowden revealed how intelligence agencies use information collected by the private sector. The White House issued a report on the collection and use of Big Data.
The American Civil Liberties Union said in a statement: “This report’s intentions are good, but waiting for Congress to pass new regulations isn’t going to help protect Americans’ privacy rights anytime soon. The FTC needs to start using its existing authority to root out bad practices now.”
Anytime personal information is exposed online it is an invasion of privacy but even more importantly an alarming risk for identity theft. There are dozens of companies that collect and sell our personal information. As the FTC commissioner said, consumers can’t protect their privacy by themselves. The process of monitoring and removing information is just too complex.
So what can be done to protect yourself? Consider a service like IdentaLocker to ensure your information and identity are safe and secure. In the information age threats are everywhere and identity theft protection has got to be something that every consumer has as a safeguard, it simply isn’t an option anymore. Until more laws are enacted to limit what type of data can be collected and shared, it may the only safeguard available should a consumer’s information fall into the wrong hands.