iStock_000019536561SmallThe US Federal Trade Commission has recommended that Congress force data brokers to give consumers access to the information collected on them and increase transparency in an industry that operates under a “veil of secrecy”.

The largely unregulated but fast-growing industry of creating data dossiers on consumers has been under scrutiny as concerns about privacy, discrimination and inaccurate information increase. But experts worry that regulators and lawmakers are unable to keep pace with sophisticated technology used by the brokers.

A widely anticipated report from the FTC, which began its investigation in December 2012, found that data brokers collect and store billions of pieces of data covering almost every US consumer, often without the individuals’ knowledge.  One company held 700bn pieces of data on more than 1.4bn consumer transactions, while another broker added more than 3bn new data points to its database every month, the report found.

The companies studied by the FTC include Acxiom, CoreLogic, Datalogix, eBureau, ID Analytics, Intelius, PeekYou, Rapleaf and Recorded Future.

The FTC recommended that Congress create legislation to establish a central portal so consumers can find data brokers and understand the kind of information that is being collected about them. The FTC also suggested lawmakers should require companies to give consumers access to their data, allow consumers to opt out of providing data and require data brokers to tell consumers what assumptions are being made about them.

The Software & Information Industry Association (SIIA) said the trade group shared the FTC goal of increased transparency but said that could be achieved without new laws or regulations. It said existing laws for consumer protection were adequate and had kept pace with technology.

“Burdensome new legal requirements threaten to impede data-driven innovation and hurt the ability of US companies to create jobs and drive economic growth,” said Ken Wasch, the association’s president.

Senator Jay Rockefeller, chairman of the Senate commerce committee, introduced a bill in February that targeted data brokers, allowing consumers to access the data files on them, correct inaccurate information and choose whether they want to permit companies to buy their personal information. The bill would also allow the FTC to impose civil penalties on data brokers violating the law.

Source:  Financial Times