Feds urge Congress to spank online brokers that prey on your data

The Federal Trade Commission is taking its frustrations with virtual data brokers to Congress.

The FTC released a report Monday titled “Data Brokers: A Call for Transparency and Accountability” that illustrates how online consumers are largely clueless when it comes to understanding how data brokers are targeting them — and what they’re doing with your personal information.

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Now, the FTC is urging Congress to enact legislation that will give Americans access to the information brokers are buying and selling after making a tacit admission that few, if any, laws protect citizens against these practices.

The report is freely available here. The FTC interviewed nine online data brokers for the study: Acxiom, CoreLogic, Datalogix, eBureau, ID Analytics, Intelius, PeekYou, Rapleaf, and Recorded Future.

FTC senior attorney Tiffany George helped draft the study. The FTC began their research last December, she told VentureBeat.

“We are providing information to consumers who may not know the extent of the broker’s practices,” George said.

As it stands now, all of the information that brokers collect — your hair color, dog name, bra size, or religious interests — is being collated, packaged, stored, and sold, largely without your consent or knowledge.

The feds said that there is little if no transparency in the broker space. According to the FTC:

“Many of the purposes for which data brokers collect and use data pose risks to consumers, such as unanticipated uses of the data. For example, a category like ‘Biker Enthusiasts’ could be used to offer discounts on motorcycles to a consumer but could also be used by an insurance provider as a sign of risky behavior.”

And this:

“Data brokers combine and analyze data about consumers to make inferences about them, including potentially sensitive inferences such as those related to ethnicity, income, religion, political leanings, age, and health conditions.”

Now it’s up to Congress to act. FTC chairwoman Edith Ramirez put it this way:

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“The extent of consumer profiling today means that data brokers often know as much — or even more — about us than our family and friends, including our online and in-store purchases, our political and religious affiliations, our income and socioeconomic status, and more.”

Among other things, the FTC is calling for the creation of a centralized portal for data brokers themselves to elucidate their data practices, require that brokers permit consumers access to the information being traded about them, and offer a so-called “opt-out” feature enabling people to suppress the use of their data, kind of like a virtual “do not call” list.

The FTC also wants data brokers to obtain permission from individual consumers before sharing, or selling, information about buying habits, for example.

The feds new study coincides with the FTC’s assertions in March it will begin going after companies in the mobile sector for basically the same reasons outlined in today’s report.

The FTC told VentureBeat that the mobile space is largely unregulated and pointed to companies violating the Children’s Online Privacy Protection Act, or COPPA, as targets.

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In that case, the FTC singled out online ad companies, ad brokers, and gaming outfits, among others. While some in the mobile sector are bracing themselves for the so-called crackdown, the FTC has yet to publicly act.

The report proclaimed that personal data has been collected by brokers on nearly every American consumer using the Web.

Indeed, the FTC said that one of the data brokers listed in the study showed they had stored data on more than 1.4 billion online transactions by individual consumers in one month alone.

FTC attorney George said that anybody using a computer should read the study.

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“It is eye-opening,” she said, “to any consumer who reads it.”

And she’s right.