Protecting Consumer Privacy and Welfare in the Era of “E-Scores,” Real-time Big-Data “Lead-Generation” Practices and other Scoring/Profile Applications [USPIRG/CDD FTC Filing]


These scores have long been an area of research interest for the non-partisan non-profit organizations U.S. PIRG and the Center for Digital Democracy. The growing use of so-called “e-scores” —a form of invisible (to the consumer) online ratings — can help determine our credit worthiness, “lifetime value,” or even the prices we pay. These e-scores can be used to blacklist or engage in discriminatory practices against individuals or even groups of consumers. We are aware that there are numerous online scores being generated for a variety of generally non-controversial uses, including predicting identity theft or fraud. However, we remain concerned that the largest and most important uses of online scoring are to substitute for the highly-regulated pre-screening regime that for years has governed the use of consumer credit reports for marketing purposes. Its proponents claim that the files developed are not on individual consumers, but on clusters of consumers. Its proponents claim online scores are simply a method for establishing audiences for serving ads. Not subject to the Fair Credit Reporting Act FCRA) regulation, they assert, are scores and other products that identify consumers on an aggregate basis (which for them means information narrowed to a small cluster of households at the ZIP+4 level) or consumers not named by name. We disagree with these representations and commend FTC for its inquiry.

For CDD and other comments on this issue, see FTC docket. (link is external)