Federal officials have warned data brokerage firms they may be violating privacy rules in selling personal data.
The FTC last year urged Congress to pass a law forcing the industry to disclose its practices, and in December FTC officials ordered nine data brokers to explain how they assemble and sell profiles of individual consumers. Sen. John D. Rockefeller IV (D-W.Va.) also haspushed for more information about the industry.
The warning letters issued over the past week started with a broader inquiry by FTC officials into 45 data brokers that appeared to market information whose use is restricted by the Fair Credit Reporting Act.
Agency staffers contacted the companies by phone and e-mail, posing as interested potential customers, to see if the employees of the firms were following federal rules. The warning letters noted possible violations in this initial screening and left open the possibility of future regulatory action should the companies fail to make changes.
“This should help raise awareness,” said Laura Berger, an attorney with the Bureau of Consumer Protection. She declined to comment on whether these or other companies are facing full investigations by the FTC.
Two of the companies that received warning letters appeared to offer “pre-screened” lists of potential customers for credit offers, FTC officials said, and two others appeared to offer information that could affect insurance eligibility. Six marketed information that could be used to make employment decisions.
The companies that received warning letters were 4Nannies, Brokers Data, Case Breakers,ConsumerBase, Crimcheck.com, People Search Now, U.S. Information Search, US Data Corporation and USA People Search. A 10th company was not named because receipt of the FTC letter had not been confirmed.