The Consumer Financial Protection Bureau (CFPB) has proposed a new rule to stop Social Security numbers and other sensitive personal information from being sold.
The proposed regulation would subject data brokers, who deal in information such as financial details, credit scores, phone numbers, and Social Security numbers, to oversight under the Fair Credit Reporting Act (FCRA). The CFPB proposal aims to “rein in data brokers that sell Americans’ sensitive personal and financial information” by limiting the sale of “personal identifiers like Social Security Numbers and phone numbers” and ensuring such personal information is shared only for “legitimate purposes.”
A data broker is a person or organization that focuses on gathering personal information, primarily from public records but occasionally from private sources. They then sell or license this information to third parties for various purposes.
The rule would make any company sells data about income or financial tier, credit history, credit score, or debt payments considered a consumer reporting agency that is required to comply with the FCRA, regardless of how such information is used. Currently, the FCRA only regulates information gathered by credit reporting agencies.
“By selling our most sensitive personal data without our knowledge or consent, data brokers can profit by enabling scamming, stalking, and spying,” CFPB director Rohit Chopra said in a press release issued on Tuesday, December 3. “The CFPB’s proposed rule will curtail these practices that threaten our personal safety and undermine America’s national security.”
The CFPB states that the rule aims to protect consumers’ personal safety and safeguard America’s national security by deterring “scammers, stalkers, and spies.”
In its press release, the agency said the sale of such sensitive information can compromise national security as “countries of concern” like China and Russia exploit inexpensive access to detailed information about U.S. military personnel, veterans, and government employees for espionage and surveillance. Criminals also misuse financial profiles to target seniors and “financially distressed individuals” for fraud and identity theft.
Sales of sensitive information can also compromise the safety of specific groups, such as law enforcement officers, judges, and domestic violence survivors, exposing them to violence and stalking. The CFPB noted a 2020 murder of a federal judge’s son that happened after the attacker purchased their home address.
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There was a huge data breach earlier this year in which the data of more than 170 million people across the U.S., Canada and the U. K.—including Social Security numbers—resulted in them being put up for sale on the dark web.
“These aren’t just isolated incidents: they represent a systemic vulnerability in how our personal data is bought and sold,” Chopra said.
