The New York Times reports that Sen. Jay Rockefeller (D-W. Va.), chairman of the Senate Commerce Committee, has opened an investigation into data brokers — companies that collect and sell data on individuals:
On Wednesday, Senator John D. Rockefeller IV, Democrat of West Virginia, opened an extensive investigation of nine leading information brokers. Because Americans now conduct much of their daily business online, the senator said he was concerned that “an unprecedented amount” of personal, medical and financial information about people could be collected, mined and sold, to the potential detriment of consumers. […]
Linda A. Woolley, the acting chief executive of the Direct Marketing Association, a trade group, called the senator’s investigation “a baseless fishing expedition.”
“I hope Senator Rockefeller understands what he’s tampering with,” she said in an e-mailed statement.
The Senate investigation represents the second Congressional inquiry into the industry’s practices this year. In July, Representative Edward J. Markey, Democrat of Massachusetts, and Representative Joe L. Barton, Republican of Texas, co-chairmen of the Bipartisan Congressional Privacy Caucus, began a House inquiry into data compilers, which is ongoing. And the Federal Trade Commission has been looking into the practices of about a dozen major data brokers. […]
The companies often use the information for a practice called “database marketing” — that is, using data mining to help clients like retailers, banks and airlines tailor marketing pitches to their best customers or identify potential new ones.
Collecting, analyzing and selling such information for marketing purposes is perfectly legal. Indeed, it’s a huge business. Some data brokers have said they maintain several thousand details on the majority of adults in the United States.
But some legislators and regulators say they are concerned that neither they nor consumers know the extent of the material that data brokers collect; whom they disclose or sell it to; and exactly what they are doing with it. […]
On Wednesday, Mr. Rockefeller sent letters of inquiry to established database marketers like Acxiom, headquartered in Little Rock, Ark.; credit reporting agencies like Experian and Equifax, which have separate marketing arms; and newer companies, like Rapleaf and Datalogix, that specialize in helping companies pursue online and mobile consumers.