Senate Bill Protecting Consumer Data Ripples Out to Debt Collection

A newly-proposed Senate bill would restrict data brokers from collecting or soliciting consumer information in deceptive ways. The Data Broker Accountability and Transparency Act, introduced by Sens. Jay Rockefeller (D-W.Va.) and Edward Markey (D-Mass.), would also let consumers access and correct their information, and opt out of having it sold for marketing purposes.

“Consumers deserve to know what information about their personal lives is being collected and sold to marketers by data brokers,” Rockefeller, chairman of the Senate Committee on Commerce, Science and Transportation, said in a statement. “This booming shadow industry, that generated more than $150 billion in 2012 and operates with very little scrutiny and oversight, is making tremendous profits off practices that can be disturbing and totally unfair to consumers.”

The Federal Trade Commission and Consumer Financial Protection Bureau have also expressed concern about data brokers’ practices. According to ACA International, the FTC warned 10 data brokers in May 2013 that they may be violating the Fair Credit Reporting Act.

FCRA applies to any entity that has the ability to affect a consumer’s credit score or report. Because of the obvious impact consumer debt has on the consumer’s credit report and score, FCRA compliance is imperative for everyone from first-party creditors to collection agencies. Our new Compliance Overview: Fair Credit Reporting Act (FCRA) offers tools and tips for the debt collection industry to comply with FCRA. Follow our compliance checklist on Red Flag Rules; see common remedies for FCRA violations; learn how to report to Equifax, Experian, TransUnion and Innovis.

The DATA Act’s specific focus on “deceptive” practices with consumer data, and the CFPB’s parallel effort to go after data brokers, also underscores the need for the debt collection industry to pay closer attention to potential UDAAP violations on the whole.  Learn how the CFPB identifies and penalizes UDAAP violations with real-world examples in Compliance Overview: UDAAP. This new report gives your collection agency actionable information about why UDAAP compliance matters and how to master it.