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Senate Report Opens a Window Into Hidden World of Data Aggregators

Sandra Fulton,
ACLU Washington Legislative Office
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December 18, 2013

Today, the powerful Senate Commerce Committee issued a damning report on the invasive practices of the online data broker industry. The Committee’s report is the result of a year-long investigation targeting nine of the biggest data aggregators, including Acxiom, Experian, and Datalogix. It discusses some of the information companies are collecting, questions their business practices, and reveals the real harms such practices can cause.

Although we have been raising the alarm over the invasive practices of data aggregators, today’s report reveals a lot of new information on this multi-billion dollar industry. According to the report:

Acxiom alone has “multi-sourced insight into approximately 700 million consumers worldwide,” and Datalogix asserts its data “includes almost every U.S. household.” Some of the companies maintain thousands of data points on individual consumers, with one providing the Committee a list of approximately 75,000 individual data elements that are in its system.

These data elements can be extraordinarily personal. Profiles include not only basic demographic information (names, addresses, telephone numbers, e-mail addresses, gender, age, marital status, presence of and ages of children in household), but also such things as profession, education level, income level, religious and political affiliations, real estate information, and sensitive health and financial information. Even information about the weight of household member can be included.

Furthermore, the report found that such data aggregation is conducted “behind a veil of secrecy” from both the public and the government. Despite numerous government investigations, the largest companies continue to resist revealing many of their business practices. The report concluded:

Data brokers typically amass data without direct interaction with consumers, and a number of the queried brokers perpetuate this secrecy by contractually limiting customers from disclosing their data sources. Three of the largest companies – Acxiom, Experian, and Epsilon – to date have been similarly secretive with the Committee with respect to their practices, refusing to identify the specific sources of their data or the customers who purchase it.

Although industry continues to argue there is no real harm caused by these practices, this report showed just how dangerous selling sensitive data on individuals can be, particularly when it covers sensitive health and financial data. At the same time the industry refuses to give consumers access to their own records. In reading the report it’s easy to understand why.

According to the report one company collects data on whether consumers suffer from health conditions including Attention Deficit Hyperactivity Disorder, anxiety, depression, diabetes, high blood pressure, insomnia, and osteoporosis. And another sold details on some 44 different categories of health conditions, including obesity, Parkinson’s disease, Multiple Sclerosis, Alzheimer’s disease, and cancer, among others.

The report also examines the industry’s potential effects on financially vulnerable populations. Below is a chart of samples of financial classifications currently being sent to marketers:

Sample list of targeting products identifying financially vulnerable populations

The goal of this classification becomes disturbingly clear when the company’s descriptions of certain categories are provided:

“Hard Times” is described by Experian as, “Older, down-scale and ethnically-diverse singles typically concentrated in inner-city apartments.” The description continues: “This is the bottom of the socioeconomic ladder, the poorest lifestyle segment in the nation. Hard Times are older singles in poor city neighborhoods. Nearly three-quarters of the adults are between the ages of 50 and 75; this is an underclass of the working poor and destitute seniors without family support….One-quarter of the households have at least one resident who is retired.”

While having an idea of the financial status of individuals can be a helpful tool, the industry’s categories appear to focus on our most at-risk populations. This information can result in predatory business practices that target the poor, elderly, or other vulnerable populations. It can also result in differential pricing. The report quotes World Privacy Forum’s Pam Dixon:

Two people going to one web site or one retail store could already be offered entirely different opportunities, services, or benefits based on their modern permanent record comprised of the previous demographic, behavioral, transactional, and associational information accrued about them.

The report also raises questions about whether the industry is skirting key existing legal protections. Much of the personal information being collected by aggregators directly mirrors data collection that is currently regulated by the Fair Credit Reporting Act—for example, marketing materials based on credit scores. It also indicates that some judgments about an individual financial status are derived from where they live. Practices like this are a form of old-fashioned redlining, which was exposed and outlawed because of its discriminatory effects on the poor and minority communities.

Senator Rockefeller’s report offers an important review of an industry that has long been functioning in the dark. It is crucial that Congress create strong regulations to reel in these invasive practices. Americans deserve to know what private companies are collecting about them and the ability to correct misinformation. Industry can no longer argue that practices that allow our most vulnerable populations to be exploited are harmless. We applaud the Senator the Committee for drawing attention to this important issue.

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