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    Washington Post: FTC warns data brokers on privacy rules

    The Washington Post reports that the Federal Trade Commission is warning data brokers (companies that gather, compile and sell or otherwise use consumers’ online and offline information for marketing or other purposes) about privacy:

    Federal officials have intensified their scrutiny of the data brokerage industry by issuing a series of formal letters in recent days alerting companies that they may be violating federal restrictions on the collection and sale of personal information.

    The letters to 10 companies — ranging from firms that compile consumer lists for credit offersto a Web site that helps parents screen potential nannies — amounted to warning shots at a large and fast-growing industry that gathers personal information and markets it to a variety of customers.

    The Federal Trade Commission is probing whether some of these practices violate the Fair Credit Reporting Act, which regulates how private companies can use personal information. Individuals are supposed to know when data reports affect their eligibility for insurance, credit or employment, and they are supposed to have the opportunity to correct errors. […]

    [Data brokeres] compile information from a variety of sources, including court databases and records of consumer behavior, to develop profiles of individuals that can be marketed to other companies. Typically, the subjects of these profiles have no idea how their information is collected and used.

    Despite polls showing widespread public concern about privacy in the digital world, U.S. officials have had only limited success in regulating such practices because few federal statutes govern personal privacy. […]

    The warning letters issued over the past week started with a broader inquiry by FTC officials into 45 data brokers that appeared to market information whose use is restricted by the Fair Credit Reporting Act.

    Read the full story to learn which companies were sent warning  letters and why.

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