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FTC wants more transparency for data brokers

By WTOP Staff

JENNIFER C. KERR
Associated Press

WASHINGTON (AP) — Companies are collecting billions of pieces of information about consumers to create individual profiles to more effectively target individuals for coupons or product offers, decide whether a would-be buyer gets a car loan or help people check out a potential mate.

The Federal Trade Commission wants more transparency in this data broker industry, allowing people to see who is gathering personal information on them and giving them more control over what is collected.

“You may not know them, but data brokers know you,” FTC Chairwoman Edith Ramirez said as the commission released a report Tuesday on the industry. “They know where you live, what you buy, your income, your ethnicity, how old your kids are, your health conditions, and your interests and hobbies.”

Five things you need to know about data collection:

MASSIVE AMOUNTS OF DATA COLLECTED

The nine data brokers studied by the FTC were: Acxiom, CoreLogic, Datalogix, eBureau, ID Analytics, Intelius, PeekYou, Rapleaf and Recorded Future.

Of the nine, the report said, one data broker’s database had information on 1.4 billion consumer transactions, such as any purchase made with a credit card or with a customer loyalty card.

The broker then peeled it down further, storing over 700 billion aggregated data elements — information such as how many times a consumer called customer service, or something as simple as what kind of toothpaste that consumer buys.

WHERE BROKERS FIND THEIR INFORMATION ON YOU

All over. They cull information on you from government, commercial and other publicly available sources.

For example, the report said, they use Census Bureau information about the demographics of your neighborhood — income, education level, commute times. Federal courts provide information on bankruptcies or local agencies offer information on real estate and the value of people’s homes.

The commission report said some brokers get information by crawling social media sites like LinkedIn, where people may not have changed their privacy settings to restrict access. Other brokers get information on purchases from retailers and catalog companies. Some obtain information from magazine publishers about the types of subscriptions sold.

THE GOOD AND THE BAD

First, the good.

Data broker products can help prevent fraud. Some brokers offer identity verification products, where a client can see if a Social Security Number is associated with someone who is dead, or whether the address used by the consumer is a prison address, the FTC said. The information gathered can also improve the kinds of product offers consumers get either online or in the mail.

Now, the bad.

A consumer, for example, may be prevented from completing a purchase based on bad, incorrect or outdated information collected by a data broker. The report said brokers could also draw conclusions about consumers that might seem innocuous but could be used in a negative way.

For example, a person classified as a “biker enthusiast” might get coupons from motorcycle dealers but also could see higher insurance if the information is used to conclude the person engages in risky behavior, said the commission study.

WHAT COULD BE DONE TO HELP CONSUMERS

The FTC recommends that Congress consider legislation to require the creation of a central database where people could see who the data brokers are and descriptions of the information they collect. It also says consumers should be allowed to opt-out of the collection.

The report also recommends that brokers be required to disclose the names and categories of their data sources so people could correct faulty information.

WHAT OTHERS ARE SAYING

Senate Commerce Committee Chairman Jay Rockefeller: “The new FTC review of data broker practices reflects growing consensus that this industry sorely lacks transparency and accountability.”

The Direct Marketing Association’s Peggy Hudson: “One interesting thing about this report is that after thousands of pages of documentation submitted over the two years of thorough inquiry by the FTC, the report finds no actual harm to consumers, and only suggests potential misuses that do not occur.”

Consumer Federation of America’s Susan Grant: “Individuals must have the right and the means to know which data brokers have information about them for marketing purposes, see what the data is and how it is categorized, correct the data if necessary, and exercise reasonable control over its collection and use.”

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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