Two data brokers settled charges brought by the FTC for $1.5 million based on allegations that they violated the Fair Credit Reporting Act (FCRA) when selling consumer data.
The FTC alleged the companies operated as consumer reporting agencies when providing reports about consumers to users such as prospective employers and landlords. The complaints filed by the agency allege the data brokers sold credit reports without taking reasonable steps to make sure that they were accurate, making sure their users identify themselves and that they had a permissible reason to seek the information, and providing FCRA-required notices to consumers. In addition to the civil penalties, both companies are prohibited from continuing their practices alleged to be illegal.
The FTC is actively engaging in FCRA enforcement activity. In January 2014, the agency settled another case regarding handling of consumer information and treatment of consumers. As we discussed previously, in March 2014, the FTC issued two guides on employment background checks that explain the rights and responsibilities of both employers and employees, while also providing tips for complying with both the FCRA. At least one Commissioner is advocating for new data broker legislation that would be more expansive than the Data Broker Accountability and Transparency Act of 2014 that was introduced in the Senate by Jay Rockefeller (D-W.Va.) and Edward Markey (D-Mass.).