Margin test

The FTC has advocated for the creation of a central website where marketing information service providers (FTC calls them “data brokers”) would be listed, with links to these companies, their privacy policies and also choice options, giving consumers the capability to review/amend the data that companies maintain. The FTC claims that such a website would bring needed transparency to the practices of companies that are not well-known to consumers. However, the proposal raises many more questions than it answers. The FTC first discussed this proposal in its 2012 report, entitled “Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers,” and FTC Commissioners and staff have repeatedly cited the need for a centralized  website in testimony before Congress and speeches to stakeholder groups. The proposal was also referenced in December 2013 reports issued by the Government Accountability Office (GAO) and Senate Commerce Committee. The concept seems simple, but it would almost certainly have the unintended effect of confusing consumers and eroding trust in e-commerce. Experian believes there are alternatives that would work better to improve consumers’ understanding of the role information providers play in the US economy, and how consumers can control the use of data held by these companies. No clear definition of a “data broker” The FTC’s central website proposal is based upon the mistaken presumption that there are only a few large companies in the marketplace that would be subject to these requirements. Unfortunately, the FTC has been unable to clearly define “data broker” in a manner that does not sweep in companies occupying large swaths of the economy. In December 2013, the GAO admitted as much, noting that “determining the precise size and nature of the industry can be difficult because definitions for resellers vary.” The Direct Marketing Association (DMA) estimates that even a narrow definition of a marketing information service provider is likely to include more than 2,500 companies from all sectors of the economy. Of course, more broadly, tens of thousands of US businesses that share and use consumer data to deliver products and services to their customers will be significantly impacted. Simply put, the entire data industry – extremely vital to the US economy — cannot be neatly or accurately identified and then subjected to unrealistic requirements of a single website. A single website doesn’t provide consumers with meaningful disclosure Due to the lack of a narrow definition of a “data broker,” the potential scope of coverage is unlimited. As the GAO found in its report, the industry for consumer data is generally separated into four broad categories. These categories are truly industries in themselves, including:  those providing fraud prevention services; those helping businesses make credit eligibility decisions; those providing consumer look-up services (i.e. telephone directories); and those that provide information for marketing and advertising purposes. As a way of limiting the scope of the proposal, the FTC has suggested that only the leading “data brokers” would be required to be included on the centralized website. This is counterintuitive, as it is these very industry leaders that have comprehensive compliance and disclosure measures already in place. It is also these industry leaders that follow robust laws (such as the Fair Credit Reporting Act), regulations (such as FTC’s Section 5), and also adhere to strong self-regulations (such as those required by the Direct Marketing Association). Further, having only a fractional portion of the industry make disclosures would not help promote greater transparency. Instead, the companies that consumers are least aware of – literally dozens and dozens of smaller data providers with long histories of questionable practices — would be free to operate outside the norms of self-regulation and best business practices. Again, these are the companies upon which the FTC truly needs to set its sights through enforcement of existing laws and regulations. The proposal’s content and format requirements remain undefined The FTC’s proposal is premature in other respects as well, raising questions about what information companies would be required to provide to consumers and in what formats. For example, here are just a couple of key considerations not currently addressed by the FTC’s proposal: Would data brokers be required to provide consumers the right to view and correct data about them? How would the data be presented to consumers? Would it be in standardized formats?  Would it include an explanation of the context of how the data is used? This gets at the heart of enabling consumers to view the data in a way that is informative, meaningful and easy for them to understand, and yet the FTC hasn’t addressed them in its proposal. Better alternatives exist to increase transparency There are much better options available to consumers that would allow for enhanced transparency. These alternatives would also avoid great expenses that would be borne by both the government and a vital industry in the operating of a website with little or no benefit to consumers. First, companies that collect and share consumer information for marketing purposes should voluntarily adhere to the DMA’s ethical guidelines, which require companies to provide robust notices to consumers and honor consumers’ choices to opt-out of having their data used for solicitations. The guidelines also require that marketing information be used only for marketing purposes. In addition, consumers who wish to have their data removed from marketing databases can choose to do so through existing opt-out mechanisms. These are available through numerous venues, including both companies’ own websites (see Experian’s own opt-out website), as well as through the DMA. We also believe that regulatory agencies should enforce existing laws against companies engaged in unfair or deceptive practices marketing and lending practices. Finally, Experian continues to play a leading role in improving the industry’s efforts to increase transparency and consumer understanding. For example, we’re working with DMA to improve its self-regulations in this area. Revisions to the guidelines will provide an immediate, workable, and enforceable way to increase the transparency and consumer understanding of data broker practices.

Every organization that touches consumer data is responsible for creating and maintaining consumer trust writes Rick Erwin, President of Targeting at Experian Marketing Services, in a recent issue of Direct Marketing News. Erwin, a direct marketing industry veteran and DMA board member, challenges the data industry at large to adopt strict guidelines and business principles that further consumer trust and effective data stewardship. Most organizations within the data industry realize the need for greater consumer education around privacy, but how do we address that need and put it into practice? At Experian Marketing Services, for example, we are guided by balance, accuracy, security, integrity and communications, the five tenets of our Global Information Values. These values aren’t visionary standards that we strive to meet; they dictate how we do business, daily. Data-driven marketing is an important sector of business and can add significant value to the end consumer. But, as Erwin emphasizes, building consumer trust for data-driven marketing requires that all companies within the data and ad tech ecosystem adopt and implement similar principles. You can read more about the five Global Information Values and how they come to life at Experian Marketing Services in Erwin’s article, “We’re all links in the chain of customer trust.”

Most consumers (89 percent) agree that credit plays an important role when buying a home or a car but only 73 percent recognize that identity fraud could affect their ability to get loans with favorable interest rates, according to a new survey from Experian Consumer Services. In addition, more than half of big-ticket purchasers fail to check their credit at any point in the buying process, which leads to surprises when it comes time to close the deal. “Identity fraud is real and affects consumers at very important times of life,” said Ken Chaplin, senior vice president of marketing for Experian Consumer Services. “In today’s environment, it’s especially important that consumers check their credit regularly to spot signs of fraud, understand better what affects their credit and make decisions that will help them be in the best position possible when it comes time to buy their dream home or car.” The key highlights of the research include: Many consumers live credit confident: Eighty-two percent of consumers report they feel confident about their credit status — only 14 percent say they worry their credit status might hurt their ability to make a home or vehicle purchase Credit affects when and what people buy: Sixteen percent of respondents delay purchasing a vehicle or home in order to improve their credit — 13 percent would purchase a more expensive car or home if they had better credit Checking credit plays a part in the buying process: Sixty percent of home buyers and 25 percent of car buyers check their credit as part of the purchase process For those that check their credit: Thirteen percent were surprised by their credit scores Thirty-six percent said their credit scores were higher than expected Eleven percent report their credit scores were lower than expected Eleven percent found something negative on their credit report that they did not know about Consumers can learn more by visiting Experian.com and watching the most recent commercials from Experian Consumer Services about how they can live credit confident™ when buying a car or securing a home loan. Survey methodology The data points referenced above come from a study commissioned by ConsumerInfo.com® Inc., an Experian company, produced by research firm Edelman Berland and conducted as an online survey of 500 car and home buyers (250 car buyers, 250 home buyers). Buyers were defined as adults who had purchased within the past year or plan to purchase in the next year. Interviewing took place from January 27–30, 2014. The margin of error is plus or minus 4.4 percent. Experian

Agreement extends Experian data and consulting services to ProAct clients Experian®, the leading global information services company, today announced an agreement with Ser Technology, developer of ProAct, a Web-based business intelligence consumer lending analysis and data warehousing solution. The agreement integrates Experian’s Global Consulting Practice expertise with ProAct providing SerTechnology’s credit union clients a 360 degree portfolio view, improving efficiency in the delivery of portfolio risk management decisioning. “We’re excited to collaborate and work more closely with Experian,” said Douglas White, executive vice president of business development at Ser Technology. “Credit unions are overwhelmed with increased risk management compliance burdens as well as executing strategic portfolio risk management strategies. With Experian, credit unions can now leverage ProAct and Experian data and business consulting for strategic portfolio risk management solutions.” ProAct clients can leverage Experian data across a broad spectrum of deliverables, including automated valuation model analysis, credit score migration, loss forecasting and stress testing many different scenarios. Experian’s consulting services will augment ProAct and Experian data, providing the insight and direction credit unions need to evaluate opportunities to improve their customer relationships. “Experian is committed to providing the advice needed to execute strategic decisions using Ser Technology software offering credit unions an essential portfolio risk management and data warehousing framework,” said Shannon Lois, vice president of Experian’s Global Consulting Practice. Experian’s Global Consulting Practice is a credentialed consultancy dedicated to creating measurable and sustainable value for organizations around the globe in a variety of industries. About Ser Technology Ser Technology Corporation, is a technology development and service company and specializes in credit pre-approval marketing, consumer lending analysis, instant credit decisioning and proprietary data encryption for over 2,700 credit unions in the U.S. The company’s passion for excellence is reflected in their web-based ProAct software which is gaining a solid reputation as being a leader in portfolio risk management solutions. For more information, visit www.sertech.com

Experian North America CEO Victor Nichols recently was recognized by the Consumer Credit Counseling Services of Orange County, California, as its 2014 Community Hero of the Year for his commitment to consumer financial literacy. Mr. Nichols and Experian are proud to have been honored with this award. Experian has long been committed to consumer financial literacy and removing the mystery surrounding credit reports and scores, and that commitment has not wavered. More than 20 years ago, Experian became the first national credit reporting company to establish a dedicated consumer education team. Over the ensuing two decades the company has used creative outreach, combining traditional materials and online technology with powerful partnerships to reach consumers of all ages and economic circumstance with critical financial information, tools and resources. Here are just a few examples of what Experian has done and continues to do to help people become more financially capable: In 1995, Experian was a founding partner of the JumpStart Coalition for Financial Literacy, an organization that advocates for mandatory financial literacy coursework in our schools. Five years ago Experian provided a grant to JumpStart to launch the first national teacher’s conference for financial educators and continues to sponsor this event annually. In 1997, we launched Ask Experian, the industry’s first online consumer credit advice column. Published continuously since, consumers submit on average more than 1,000 questions each month. The company awards financial literacy grants in excess of $300,000 annually to support innovative consumer financial education programs conducted by non-profit organizations. Grants have facilitated programs that reach hundreds of thousands of consumers each year including high school and university students, military personnel, minority communities, the underbanked, and cities particularly hard hit by the recession. Our education partners include the National Foundation For Credit Counseling, the Center for Financial Services Innovation, the Credit Builders Alliance, the National Consumers League, the InCharge Institute, the Mission Asset Fund and Call For Action. Recently, Experian established an Education Ambassador program to train its own employee volunteers so that they can support outreach programs in communities across the country. Social media has further enabled us to talk directly with people about critical financial subjects. Our weekly #CreditChat is always a lively discussion and is open to anyone who would like to join in the conversation on Twitter every Wednesday and 12 p.m. Pacific time. Learn more about Experian’s commitment to consumers and find tips on how to live credit smart.