As part of the Federal Trade Commission's report on online privacy released this week, the agency called for a new law to allow people to review the vast amounts of information being collected about them as the Internet and smartphones make it easier to create digital dossiers of just about anyone's life.
The report is an unusually tough one from a consumer protection agency that prefers to coax companies into adopting voluntary principles. It comes a month after the Obama administration issued a proposed "Consumer Privacy Bill of Rights" and urged technology companies, consumer groups and others to work together on developing more safeguards.
The FTC said Congress needs to impose more controls over so-called "data brokers" that profit from the collection and sale of files containing sensitive information that can affect people's ability to get a job or find a place to live. These data brokers range from publicly traded companies such as Acxiom Corp. to a hodgepodge of small, regional services that may only have two or three employees.
"Consumers are often unaware of the existence of these entities, as well as the purposes for which they collect and use data," Monday's FTC report said.
An investigation by The Associated Press last year found that data brokers often store incorrect or outdated information, including criminal records. In some cases people are denied jobs because data brokers incorrectly report them as convicted felons. Widespread complaints about inaccurate records triggered a class-action lawsuit that culminated in one database company, HireRight Solutions Inc., settling the case for $28.4 million last year.
The FTC is pushing for a law that would let consumers see their files and dispute personal data held by information brokers. It would be similar to current federal laws that guarantee consumers free access to their credit reports once a year.
"We would be happy to engage in a dialogue about what should be included in a law and what shouldn't be," said Jennifer Barrett Glasgow, Acxiom's chief privacy officer. She predicted it could take at least three years to get a law approved. It took years of political haggling before the Fair Credit Reporting Act was amended in 2003 to include free annual access to credit reports.