Request for Comments and Announcement of FTC Workshop on Spring Privacy Series #00002

Submission Number:
00002
Commenter:
Ed Mierzwinski
Organization:
U.S. PIRG
State:
District of Columbia
Initiative Name:
Request for Comments and Announcement of FTC Workshop on Spring Privacy Series
Matter Number:

P145401

U.S. PIRG intends to file a more detailed comment and to request to participate in the workshop on "Alternative Scoring Products." These scores have long been an area of research interest for U.S. PIRG and our collaborators at the Center for Digital Democracy. The growing use of so-called “e-scores” —a form of invisible (to the consumer) online ratings — can help determine our credit worthiness, “lifetime value,” or even the prices we pay. These e-scores can be used to blacklist or engage in discriminatory practices against individuals or even groups of consumers. We remain concerned that the scores are not simply a method for establishing audiences for serving ads, as is claimed, but instead have become a substitute for the highly-regulated pre-screening regime that governs the use of credit reports for marketing purposes. Its proponents also claim that the files developed are not on individual consumers, but on clusters of consumers. Not subject to FCRA regulation, they assert, are scores and other products that identify consumers on an aggregate basis—which for them means information narrowed to a small cluster of households at the ZIP+4 level. We disagree with these representations and commend FTC for its inquiry. Given the capabilities of the contemporary data-driven consumer landscape, an array of detailed information can be used to create a consumer profile and then deliver a “micro-targeted” ad or marketing message designed to initiate a process leading to a transaction (such as the sale of a financial product). As ads for credit cards and loan products are delivered directly to consumers on their computers and mobile phones, and are based on data that have analyzed a consumer’s behavior, history, and financial transactions, should these practices not be considered a prescreened offer under the FCRA? What criteria are used to perform the prequalification assessment, and do they or should they trigger the FCRA? We look forward to discussing these important matters further.