CFPB Proposes Rule to Stop Data Brokers from Selling Sensitive Personal Data to Scammers, Stalkers, and Spies

In a significant move to enhance consumer privacy and security, the Consumer Financial Protection Bureau (CFPB) has rolled out a proposed rule that could change the landscape of data brokerage in the United States. This rule aims to clamp down on the sale of sensitive personal and financial information by data brokers to individuals or entities that might misuse this data for nefarious purposes, including scammers, stalkers, and even foreign spies. According to Consumer Financial Protection Bureau Director Rohit Chopra, “Data brokers – the outfits that collect and sell detailed information about our personal and financial lives – are making this data available to anyone willing to pay.” The scope of the problem is significant. Director Chopra noted that data brokers have information relating to U.S military personnel, law enforcement officers as well as consumers in general. Director Chopra noted that recently “we learned that hackers had accessed nearly 3 billion records of Americans’ sensitive data, including Social Security numbers, from a single data broker.” The consequences of such information falling into the wrong hands and causing catastrophic damage are significant. For example, “In 2020, a federal judge’s son was murdered by an attacker who purchased her home address from a data broker,” said Director Chopra. Under these circumstances the CFPB felt compelled to propose rules to regulate data brokers.

Understanding the Proposal:

The essence of the CFPB’s proposal is to bring data brokers under the umbrella of the Fair Credit Reporting Act (FCRA). This would mean that data brokers would be classified as consumer reporting agencies, thereby subjecting them to stringent federal privacy and security regulations. Here’s what this entails:

Consumer Reporting Agency Status: Data brokers would need to adhere to FCRA’s rules, which include ensuring the accuracy of the data, limiting the use of data to ‘permissible purposes’, and providing consumers with rights to access, dispute, and control their personal information.

Sensitive Information Protection: The rule specifically targets the sale of highly sensitive data such as Social Security numbers, precise location data, and detailed transaction histories. By restricting the sale of such information, the CFPB aims to prevent its use in identity theft, financial fraud, or personal safety threats.

Consumer Consent: Under the proposed framework, data brokers would need explicit consumer consent before selling or sharing their data, especially for purposes unrelated to the initial collection reason or for uses that could pose risks to consumer safety or privacy.

Implications for Consumers:

Enhanced Privacy: Consumers would gain more control over their personal information, reducing the risk of it being exploited by bad actors.

Legal Recourse: This regulation provides a legal basis for consumer protection law firms to challenge data brokers in court, advocating for clients whose data has been mishandled or misused.

Prevention of Abuse: By classifying data brokers under FCRA, the rule aims to prevent data from falling into the hands of those who might use it for stalking, harassment, or espionage.

What This Means for You:

For individuals, this rule could mean a significant step forward in safeguarding your personal information online. For businesses, particularly those involved in data brokerage, it means a shift towards more transparent and responsible handling of consumer data.

Where You Can Find Help:

Attorneys who specialize in consumer protection law, particularly on the plaintiff’s side, will closely monitor the development of this proposed rule and will be prepared to assist those affected by data broker practices that violate this new framework. Whether you’re concerned about your personal data’s security or have already experienced harm due to data misuse, a consumer protection lawyer will be able to provide the legal support you need.

Next Steps:

The – Stay informed about the rule’s progression and how it might apply to you.

– Consider reviewing your privacy settings on platforms where you share personal data.

– Contact an attorney who specializes in consumer protection law for a consultation if you believe your data might have been compromised or used inappropriately.

Together, let’s work towards a safer digital environment where your privacy is not just a policy but a priority.