Spokeo, an online data broker, is accused of peddling inaccurate information and violating consumer protection laws in a complaint sent to the Federal Trade Commission on Wednesday.
The Center for Democracy and Technology, which filed the complaint, alleges Spokeo purports to provide information about individuals’ credit ratings and other financial data, but fails to disclose the source of the data or allow consumers an opportunity to dispute and correct false information.
The site also does not let consumers know who has sought access to their information or inform users, such as employers, that federal law requires them to notify a job applicant if they have reached an adverse determination about an applicant based on information they may have obtained from the site.
The CDT notes in its complaint (.pdf) that much of the information provided in Spokeo profiles is inaccurate, a point verified by Threat Level in searches conducted on various individuals in the Spokeo database.
Spokeo President and co-founder Harrison Tang did not respond to a call for comment from Threat Level, but he has admitted in previous media interviews that the information his site provides contains inaccuracies, which he has blamed on errors in original source materials and in the way the algorithm assesses aggregated information.
Under the Fair Credit Reporting Act, entities that broker certain information about consumers, such as credit reporting agencies that provide credit assessments of consumers, must make an effort to provide fair and accurate information and give consumers an opportunity to correct inaccurate information and put limits on who can access their data.
The company does publish a disclaimer on its site that data provided through its service “may not be used as a factor” in establishing a consumer’s eligibility for credit, insurance, or employment and appears to deny that the FCRA applies to it — Spokeo asserts in its terms of use that it is not a consumer reporting agency.
But at the same time the company markets itself to human resource professionals as a service for conducting background checks on job applicants as well as to law enforcement agencies, and does provides “credit estimates” on individuals, as well as information on their income, investments and mortgage.
Consumers must pay a subscription fee to Spokeo to see the credit level the site attributes to them — such as “low” or “high” credit — but are not given information about how Spokeo arrives at its determinations about their credit. There is also no way for someone to restrict access to their profile, though the site says individuals can opt to have their profile removed from the site. Some consumers have complained, however, that the opt out feature does not work sufficiently.
The FCRA defines a “consumer reporting agency” as any entity that regularly engages in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties. . . .”
Spokeo offers free and subscription-based searches of detailed profiles on individuals. The profiles can include information on an individual’s religious and political affiliation and ethnic background as well as information about education level, family relationships (such as the names of other adults living in a residence and the number and ages of children living there) and shopping preferences and recreational activities, such as interests in casino gambling and genres of books and music that an individual favors.
The site, which claims to receive millions of hits a day, also provides vague assessments about people, such as whether someone “seeks opportunity,” is “self driven,” “is not interested in politics,” and “cares about healthy living.”
The site claims to get its information from hundreds of online and offline sources, such as phone book databases, social networks, marketing lists, business sites and “other public resources.” In a recent interview with Fox News, Tang said his site grabs photos, videos and blog data from 43 social networks, including Google map images of an individual’s residence. Most of the data is publicly available on the web, though the company doesn’t say what information it possesses may not be publicly available.
Spokeo’s advantage, the site claims, is its algorithms, which aggregate “scattered data into coherent people profiles, giving you the most comprehensive intelligence about anyone you want to find.” But Tang has acknowledged the algorithm’s limitations on providing accurate information.
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