Data privacy is more than just a modern buzzword—it’s about protecting our most personal information from misuse or abuse. Over the past few years, data brokers have become a topic of growing concern. These companies often operate behind the scenes, gathering and selling large amounts of our personal information to whoever is willing to pay for it.
Many people have no idea how extensive these data-collection operations are or what is being done with their sensitive information. Now, the Consumer Financial Protection Bureau (CFPB) is aiming to rein in these practices with a new proposed rule.
At Consumer Law Attorneys, we fight for consumers’ rights every day. Although much of our focus is on defending homeowners from unfair foreclosures, wage garnishments, and aggressive collection companies, we’re also deeply invested in helping people protect their privacy. Just as we stand up for those facing foreclosure, we believe in standing up for individuals whose data is at risk of being sold and mishandled.
The Growing Data Broker Industry
Data brokers are companies that collect, analyze, and sell personal information about consumers—often without those consumers even knowing it. Their methods can be astonishingly thorough. They pull data from public records, monitor online purchases, and even capture your activity on social media and mobile apps. Surveys, questionnaires, and loyalty programs also feed into these extensive data-gathering practices.
Many organizations buy this data: marketing firms, big banks, government agencies, insurance companies, and more. Why? Because knowing more about people helps businesses tailor their products, run targeted advertisements, and, in some cases, decide if they want to extend credit or insurance coverage. However, this “insider insight” can also pose risks to you as an individual.
Without the right regulations, data brokers can spread some of your most sensitive personal details—from your financial status to your political beliefs—across a huge marketplace. In an era where many everyday transactions take place online, consumers often have no clue that all these digital footprints are being traced, packaged, and sold.
Why It’s Concerning
One major issue with data brokers is the lack of transparency. If you’re like most people, you probably don’t recall ever giving permission for a company to collect and sell your home address history, your spending habits, or your Social Security number. Even if they did include this practice in some small print, most people are not aware of it.
Another concern is the potential for inaccurate or outdated data. Unlike credit reporting bureaus, which operate under specific rules and let you dispute mistakes, many data brokers don’t offer such consumer-friendly correction processes. Errors in the data they sell might lead to anything from unfair credit denials to unexpected telemarketing harassment.
Then, there’s the problem of identity theft and fraud. If your Social Security number or financial details end up in the wrong hands, the results can be devastating. Predatory marketers may also use sensitive information—like your health status—to target you with misleading or exploitative ads.
Additionally, there are worries about national security. Certain data brokers have little oversight over who buys the information, meaning even foreign agents might be able to purchase sensitive data about government officials or military personnel.
The CFPB’s Proposed Rule
On December 3, 2024, the Consumer Financial Protection Bureau announced a proposed rule specifically aimed at regulating the data broker industry. According to the CFPB, companies that operate as “data brokers” should be classified in many cases as consumer reporting agencies, making them subject to existing laws under the Fair Credit Reporting Act (FCRA).
This represents a big shift. Right now, many data brokers escape traditional consumer protection rules by arguing they’re not “credit agencies” like Equifax or Experian. The CFPB’s new proposal would close that loophole and require data brokers to follow specific guidelines regarding how they collect, maintain, and share personal information.
What the Proposal Could Do
Under the proposed rule, the CFPB intends to impose stricter limitations on data brokers’ activities, particularly the sale of “sensitive data” such as Social Security numbers, phone numbers, and other unique personal identifiers. It would also require data brokers to get explicit permission from consumers before obtaining or sharing credit reports.
Additionally, the proposed rule might force data brokers to take responsibility for accuracy. Right now, it’s all too common for data brokers to pass along outdated or incorrect data without any obligation to verify it. If this rule goes into effect, they’d have to correct errors and give consumers the ability to dispute information—similar to how you can dispute items on your credit report.
Finally, the proposed rule touches on restricting certain uses of financial data. Brokers often sell information about your income, creditworthiness, and more—data that can be instrumental in mortgage approvals or loan offers. Under the new requirements, that information might only be shared for what the CFPB considers “legitimate” purposes, reducing the risk of predatory marketing and lending practices.
Key Takeaways From the CFPB’s Proposed Changes
Here is a summary of the CFPB’s proposed changes:
- Classifying data brokers as consumer reporting agencies: They’d have to follow Fair Credit Reporting Act rules.
- Limiting the sale of sensitive data: Social Security numbers and phone numbers wouldn’t be so easily traded.
- Ensuring legitimate use of financial data: Income and other financial information could only be used for essential purposes, like mortgage evaluations.
- Requiring consumer consent: People would have to give explicit permission before their credit data is shared.
- Imposing accuracy standards: Brokers would be legally responsible for the data they sell.
- Giving consumers access and dispute rights: You could see what’s in your profile and challenge errors.
Challenges and Possible Roadblocks
Even if the proposed rule has strong consumer protections, it faces obstacles. The data broker industry is likely to push back, claiming that these regulations could stifle innovation or burden them with new compliance costs.
Meanwhile, everyday people might not be aware that the rule is even under consideration. The public comment period for the proposed regulation is open until March 3, 2025. After that, the CFPB will decide if it will finalize the rule, revise it, or scrap it altogether.
If you believe in stronger consumer protections, you can stay informed and, if you feel inclined, add your voice to the public comment process. Writing or calling your representative is another way to show support for responsible data privacy laws.
Contact Consumer Law Attorneys Today
If you or someone you know is concerned about how data brokers use and sell personal information—or if you’re facing aggressive debt collection or a pending foreclosure—contact Consumer Law Attorneys today at 877-241-2200. Our team is ready to review your situation, advise you on possible next steps, and fight for your rights with every tool at our disposal.
Don’t let corporations trade your private information like a commodity. Get in touch now to learn how we can help you protect your privacy, defend your financial well-being, and stand up for what’s right. Your data and your home deserve the strongest possible defense—let us provide it.