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Release date 07/20/2011
WASHINGTON — Consumers Union, the nonprofit publisher of Consumer Reports, today wrote members of Congress to urge them to hold hearings on the so-called “fourth bureau,” a collection of private companies that compile and sell consumer data to entities such as lenders, landlords, employers and health-care providers, saying these firms “unfairly use consumers’ data to draw potentially harmful and unreliable conclusions about their creditworthiness and ability to pay.”
In a letter to members of the House and Senate committees on commerce and banking, Ioana Rusu, regulatory counsel for Consumers Union, wrote, “Unlike the three major credit bureaus, which track consumer scores based on credit card activity, auto notes and mortgages, the ‘fourth bureau’ tracks and investigates traditionally unreliable indicators of creditworthiness, such as magazine and cable subscriptions, utility bills, and child care tuition payments. No standards exist for what types of information should be collected and how it should be used, nor are these companies required to ensure the accuracy of compiled information.”
She cited a recent Washington Post article (“Little-Known Firms Tracking Data Used in Credit Scores,” July 17), which reported on how information collected by these firms is used, as well as the story of an Arkansas woman whose credit was destroyed by incorrect information contained in her “fourth bureau” file.
Rusu wrote, “Most American consumers have no way of knowing that this information is being collected about them and used in ways that could affect their interest rates, housing, and employment. Even when individuals find out about the ‘fourth bureau’s’ existence, accessing and correcting data about them is nearly impossible.”
Consumers Union is urging lawmakers to consider whether the requirements of the Fair Credit Reporting Act (FCRA), such as an annual free credit report and a consumer access to a toll free number, should apply to such data brokers. In cases of adverse action or risk based pricing, consumers should be entitled to receive the same credit report that creditors received. “Consumers are entitled to accuracy, fairness and transparency in the way their information is used to establish creditworthiness,” Rusu wrote.
Rusu added that some recent bills in Congress would begin to address activities of such companies by requiring them to maximize accuracy of consumer records, to provide consumers with access, and to establish a process by which consumers can correct inaccurate information. But many consumers could still be left not knowing that these entities are aggregating and selling information about them.
For a copy of Consumers Union’s letter to the House and Senate committees, contact David Butler at dbutler@consumer.org or Kara Kelber at kkelber@consumer.org.
Consumer Reports is a nonprofit membership organization that works side by side with consumers to create a fairer, safer, and healthier world. For 80 years, CR has provided evidence-based product testing and ratings, rigorous research, hard-hitting investigative journalism, public education, and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or other commercial influences, CR has exposed landmark public health and safety issues and strives to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto safety standards, to winning food and water protections, to enhancing healthcare quality, to fighting back against predatory lenders in the financial markets, Consumer Reports has always been on the front lines, raising the voices of consumers.
© 2011 Consumer Reports. The material above is intended for legitimate news entities only; it may not be used for advertising or promotional purposes. Consumer Reports® is an expert, independent, nonprofit organization whose mission is to work side by side with consumers to create a fairer, safer, and healthier world. We accept no advertising and pay for all the products we test. We are not beholden to any commercial interest. Our income is derived from the sale of Consumer Reports® magazine, ConsumerReports.org® and our other publications and information products, services, fees, and noncommercial contributions and grants. Our Ratings and reports are intended solely for the use of our readers. Neither the Ratings nor the reports may be used in advertising or for any other commercial purpose without our prior written permission. Consumer Reports will take all steps open to it to prevent unauthorized commercial use of its content and trademarks.
Consumer Reports is a nonprofit membership organization that works side by side with consumers to create a fairer, safer, and healthier world. For 80 years, CR has provided evidence-based product testing and ratings, rigorous research, hard-hitting investigative journalism, public education, and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or other commercial influences, CR has exposed landmark public health and safety issues and strives to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto safety standards, to winning food and water protections, to enhancing healthcare quality, to fighting back against predatory lenders in the financial markets, Consumer Reports has always been on the front lines, raising the voices of consumers.
© 2011 Consumer Reports. The material above is intended for legitimate news entities only; it may not be used for advertising or promotional purposes. Consumer Reports® is an expert, independent, nonprofit organization whose mission is to work side by side with consumers to create a fairer, safer, and healthier world. We accept no advertising and pay for all the products we test. We are not beholden to any commercial interest. Our income is derived from the sale of Consumer Reports® magazine, ConsumerReports.org® and our other publications and information products, services, fees, and noncommercial contributions and grants. Our Ratings and reports are intended solely for the use of our readers. Neither the Ratings nor the reports may be used in advertising or for any other commercial purpose without our prior written permission. Consumer Reports will take all steps open to it to prevent unauthorized commercial use of its content and trademarks.