Given yesterday’s post, there is one bit of news we should not ignore.  This week the Federal Trade Commission announced it has been conducting an investigation of data brokers and their compliance (or non-compliance) with applicable law.  Specifically, the FTC looked at compliance with the Fair Credit Reporting Act.

According to the FTC:

FTC staff members posed as individuals or representatives  of companies seeking information about consumers to make decisions related to  their creditworthiness, eligibility for insurance or suitability for  employment.

The FTC says that ten of the forty-five companies contacted appear to have violated the Fair Credit Reporting Act.  (That’s a pretty high percentage.  I wonder how many more there are out there.) All ten received warning letters from the FTC.

The warning letters are based on allegations that the businesses acted as Consumer Reporting Agencies.  Under the Fair Credit Reporting Act, a data broker is a Consumer Reporting Agency if the broker provides consumer information to other businesses for (among other things) use in evaluating individuals for employment.   Consumer Reporting Agencies have certain obligations with respect to personal information in their possession and their practices in providing that information to others.

This is one of the warning letters:

Last year data broker Spokeo paid an $800,000 fine to settle charges that it violated the Fair Credit Reporting Act in a similar manner.  The FTC complaint in the Spokeo case provides a good summary of the applicable law: