It’s tricky. Sometimes the information is used by unscrupulous businesses that target the poor and elderly, including telemarketers who peddle scams via the telephone. Referring someone who already is in debt to a high-interest loan company for additional debt may not be doing them a favor. Lawmakers are wary and keeping an eye on the situation.
In its less worrisome guise, Big Data directs information to businesses that have legitimate interests in helping those who are in a bind. These include payday lenders, debt consolidation firms and other marketers.
Among the sources the brokers use to glean data are websites you browse, the credit cards you apply for and surveys to which you respond. Certain zip codes can suggest a high proportion of people who are in a financial bind. By tracking these and other sources, the brokers can then sell the information to the interested companies.
One data broker, List Connection, is adept at finding potential customers by learning who is at least 90 days in arrears on payments. According to its website, it can generate leads that are excellent prospects for payday loans, secured credit cards, debt consolidation, sub-prime credit and other financial assistance.
The List Connection data is intended for firms that are genuinely interested in helping people with bad credit, said Ken Wood, vice president for management.
Because of the potential for unscrupulous use of personal financial data, U.S. Senator John (Jay) Rockefeller, West Virginia, who heads the Senate Commerce Committee, has developed legislation that would allow customers to read and, if necessary, correct their information. The ability to opt out of the lists is included.
Rockefeller named one broker, Multimedia Lists, as one that offers such “get-rich-quick” schemes as questionable promotional offers, sweepstakes, contests and other dubious opportunities that might raise unreasonable expectations in those who are desperate.
The Fair Credit Reporting Act prohibits marketers from using sensitive credit information, such as credit scores, unless it is to make a firm offer of credit, such as a credit card or auto loan. But those who collect personal credit data argue that some information, such as whether you are facing foreclosure or have been denied a credit card, should be allowable information for their uses.
The delicate balance between legitimate uses of the data and the potential for misuse has become a serious issue for privacy advocates.
Ed Mierzwinski, consumer program director for the U.S. Public Interest Rearch Group, is one who believes in stronger safeguards. “We shouldn’t use our most private information for just any marketing purpose. We need additional protections,” he said. His group is pushing for more transparency as to who is buying information and how they are using it.
Some of the larger brokers, such as Epsilon, respond that they have built-in guidelines and assure that their clients use them. The Direct Marketing Association also insists that clients adhere to its guidelines and reports those that do no to the Federal Trade Commission.
As the debate heats up, it appears likely that more curbs may be put on the way your personal financial information can be used.