The Consumer Finanial Protection Bureau (CFPB) has launched an inquiry into the practices of data brokers and has requested information to gain more insight into their operations. The agency aims to examine businesses that collect, monitor, and sell individuals’ information and determine if they fall under the coverage of the Fair Credit Reporting Act (FCRA). The CFPB also plans to investigate any potential harm to consumers resulting from these practices and assess whether they have contributed to market abuse.
Companies known as data brokers gather data from multiple sources, frequently from public sources, and then sell or license this information to other parties. The CFPB has expressed unease over the privacy, accuracy, and security of this data, as well as concerns over whether consumers are aware of or have given their consent for this practice to occur.
This request will allow the public to provide feedback about companies that can significantly affect their lives. In addition, the agency will provide more information about this industry for consumers. This feedback should also supply the CFPB with the necessary knowledge to determine how to ensure these companies follow federal laws.
Current data surveillance methods allow companies to view consumers’ digital activities. This surveillance enables them to profit from people’s private information. Through this study, the CFPB will determine whether the FCRA rules fully consider and address these practices.
Initially, the FCRA was passed in 1970 and formed the foundation of consumer rights. It intended to address concerns about data brokers preparing and selling detailed reports about consumers. Individuals or businesses then use this information for credit, housing, and employment decisions, among other uses. As such, the FCRA would protect consumers by regulating the required accuracy standards for this information. It also provided consumers the right to dispute information and restricted the uses for purchased reports.
The CFPB hopes to learn about the business models used in the data broker market through this public opinion. The agency also wants to understand the brokers’ practices and what data they collect and sell. In addition, the CFPB will investigate the sources used to acquire this data. Additionally, the CFPB intends to learn about any experiences consumers have had with data brokers. For example, any attempts by individuals to correct, remove, or regain control of their data.
It is crucial for employers to conduct background checks on potential employees. However, they must ensure that the acquired information proves accurate and complies with all applicable laws. The best way to do this is to partner with a trustworthy background check company.