The US government’s consumer protection watchdog has announced plans to crack down on predatory data broker practices that have been linked to scams, violence, and threats to national security. The Consumer Financial Protection Bureau (CFPB) is proposing a rule that would allow regulators to police data brokers under the Fair Credit Reporting Act (FCRA), a privacy law enacted over 50 years ago. This proposal would limit data brokers’ ability to sell sensitive personal information, such as financial data, credit scores, phone numbers, Social Security numbers, and addresses. According to the CFPB, closing these loopholes will benefit vulnerable individuals and the country as a whole.
The FCRA, passed in 1970, requires credit reporting agencies to adhere to certain standards of accuracy and privacy when dealing with people’s financial information. The CFPB’s proposal aims to treat data brokers like credit reporting agencies when they handle this sensitive data. This would require data brokers to obtain explicit authorization before acquiring or sharing people’s credit information, rather than burying these permissions in lengthy legal documents that are often unreadable for the average person.
In a statement, CFPB director Rohit Chopra emphasized the potential harm caused by data brokers, citing recent attacks on US telecommunications systems attributed to China. He stated that data brokers make personal data available to anyone willing to pay, posing a threat to personal safety and national security. The CFPB’s proposed action is aimed at stopping data brokers from enabling scammers, stalkers, and spies from undermining the safety of individuals and the country.
The CFPB’s approach of using existing US law to regulate data brokers is not new. In February 2023, a group of consumer-focused nonprofits urged Chopra to enforce the powers granted by the FCRA to prevent data brokers from engaging in harmful practices. Protecting personal information is becoming increasingly urgent in the current political climate, according to attorney Laura Rivera, who specializes in technology journalism.
