EPIC, Demand Progress, Just Futures Law, and the National Consumer Law Center support Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra’s announcement that the agency will use its rulemaking authority under the Fair Credit Reporting Act (FCRA) to address the rampant harm data brokers are causing to the public. The FCRA requires that covered entities have a permissible purpose to sell covered personal data, that they follow reasonable procedures for maximum possible accuracy, and that they provide an opportunity for consumers to inspect and correct information about them.
“Data brokers have been flagrantly evading the FCRA when they sell private or sensitive information about us, including: property records, asset information, criminal records, social media posts, license plate reader data, and demographic categorizations. When they sell this information for purposes covered by the FCRA, such as employment, credit, and government benefit screenings, they need to follow the Act’s requirements,” said Chi Chi Wu, senior attorney at the National Consumer Law Center. “Brokers should not be selling our information without complying with the law and the CFPB’s action is a step towards eliminating these abuses.”
Director Chopra explained that as part of their ongoing efforts to rein in data brokers, the CFPB will clarify through rulemaking that “credit header” data falls under the FCRA and that entities selling the types of data normally contained in consumer reports will have to comply with the statute. Credit header data includes names, addresses, phone numbers, Social Security numbers, and birth dates. Expanding the FCRA’s coverage will be a strong first step in protecting vulnerable consumers.
Earlier this year, a coalition of groups urged the CFPB to “ensure and clarify coverage of data brokers when they sell data that should be considered a ‘consumer report’ under the Act.” The coalition called on the CFPB to clarify that credit header data, which is often used in ways that jeopardize the safety and security of immigrants in the U.S., is covered by FCRA.
The groups look forward to engaging with the CFPB throughout the rulemaking process to hold data brokers accountable.
“For far too long, data brokers have been allowed to profit off Americans’ personal data with little to no oversight, compromising people’s privacy and safety. The CFPB’s action will bring much needed transparency and accountability to the data broker market,” said Ben Winters, Senior Counsel at Electronic Privacy Information Center (EPIC).
“We applaud the CFPB for using their authority to address the credit header loophole and rein in the data broker industry. Data brokers have taken advantage of these data loopholes to profit immensely from selling the personal information of anyone and everyone. This is a huge step in protecting our privacy, civil liberties, but most importantly the people whose lives are impacted by their sensitive data being sold to the highest bidder,” said Laura Rivera, senior staff attorney with Just Futures Law.