Data Brokers Draw Increased Scrutiny

by Mike Bevel CollectionIndustry.com

Customer lists are for sale and fetching top dollar for data brokers. It?s a largely unregulated market, and an important one for the credit and collections industry. Yet, due to abuses and some sketchy-at-best transactions, consumers ? and legislators ? are growing more leery and wary.

According to a story running on InformationWeek.com, data brokers are getting the message that changes are needed if they want to stay in business and on the right side of the law. ChoicePoint, a provider of identification and credential verification services, has abandoned selling to some markets ? including collection agencies ? due to increased scrutiny over its business practices.

The move cost the company $15 to $20 million in revenue.

It?s a practice that could prove difficult for collection agencies in the future. Data brokers are often used as a way to track down hard-to-find debtors. However, with more and more attention being paid to data brokers, and as more and more discussion and debate focuses on consumers? rights to privacy, it is likely that these sources of consumer data might dry up, or be marketed in vastly unusable ways.