I'm being profiled constantly and I rarely know what's in the files and how my information is packaged and brokered.
"For decades, policymakers have expressed concerns about the lack of transparency of companies that buy and sell consumer data without direct consumer interaction," the FTC says.
It was the lack of transparency surrounding credit information that led to the enactment of the Fair Credit Reporting Act in 1970.
The FTC took an in-depth look at nine data brokers who collect information - online and off - to verify people's identity, detect fraud and market products. So, it's an industry that knows a lot about your personal business.
Consider this from the report: One broker's database has information on 1.4 billion consumer transactions. Another's store of information covers $1 trillion in consumer transactions. One broker adds 3 billion records each month to its databases.
Before you get completely outraged about this, there are some benefits to the collection of all your data. Knowing your patterns can help prevent companies from being duped by crooks pretending to be you. However, as many people have discovered, there are also many downsides to the storing of your data. Consider the following, according to the FTC:
* Consumers can be turned down for products based on an error or errors in reports they never knew existed. One data broker recently settled charges brought by the FTC after the agency said the firm had violated the Fair Credit Reporting Act by failing to assure information it obtained from sex-offender registry records matched the specific job applicants they were researching. In many instances they got it wrong, the FTC said.
* Data brokers often create marketing categories based on your information, including your shopping history. But placing you in a particular segment might end up costing you money. "For example, while a data broker could infer that a consumer belongs in a data segment for 'biker enthusiasts,' which would allow a motorcycle dealership to offer the consumer coupons, an insurance company using that same segment might infer that the consumer engages in risky behavior," the FTC notes. In the insurance business, higher risk often means higher premiums.
"While some of these segments seem innocuous, others rely on characteristics, such as ethnicity, income level and education level, which seem more sensitive and may be disconcerting," the FTC said.
* Your information doesn't die. Some of the data brokers store all data indefinitely. There can be a history of your old home addresses. But just as such data can stop identity thieves, it can also help them. Such information can help criminals crack security questions or predict your passwords.
After looking at the industry, the FTC says Congress needs to pass legislation that will enable consumers to find out what is being collected about them.
"Many of these findings point to a fundamental lack of transparency about data-broker-industry practices," the FTC said. "Data brokers acquire a vast array of detailed and specific information about consumers; analyze it to make inferences about consumers, some of which may be considered sensitive; and share the information with clients in a range of industries. All of this activity takes place behind the scenes, without consumers' knowledge."
There were three recommendations in particular from the FTC that I hope will be taken up by Congress:
* Give consumers access to their own data, including any sensitive information.
* Provide clear and easy ways for people to opt out of having their data collected and sold.
* Require companies to disclose where they got information or the data source so that consumers can correct errors.
At this point, we can't put the genie back in the bottle. Our information is out there. The best we can hope for is to make sure inaccuracies don't cause us any financial pain.