FTC Urges Legislation to Make Data Brokers More Transparent, Emphasizes Healthcare

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The Federal Trade Commission issued a report discussing "a fundamental lack of transparency about data broker industry practices." The report, a summary of findings of a study of nine data brokers, also recommends legislation to increase transparency around data brokers.

Data brokers collect, sell and/or share personal information from a number of sources, and while the information can be used for a beneficial reason — verifying identity or detecting fraud — there is no direct consumer interaction. Many consumers are often unaware their personal information is being collected, sold or shared.

Amongst other items, the report recommends Congress to consider legislation protecting sensitive information such as health information. The FTC suggests legislation requires data brokers to disclose that they are using raw data and that they extract certain elements from the data. Additionally, it suggests "consumer-facing sources" receive expressed consent from consumers before collecting sensitive information.

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