Senate panel criticizes business practices of credit reporting agencies

Sen. Elizabeth Warren, D-Mass., questions Richard Smith, former Chairman and CEO, Equifax Inc., as he testifies during a hearing on October 4. On Tuesday, a Senate panel reconvened for another hearing on the Equifax data breach. Photo by Kevin Dietsch/UPI

Oct. 18 (UPI) — Senators from both parties Tuesday criticized the credit reporting industry and sought answers on how to fix it during a hearing in response to reports last month of an Equifax data breach that affected millions of Americans.

“The credit reporting industry is a threat to each of us personally, but it is also a threat to our national security,” Sen. Elizabeth Warren, D-Mass., said during the hearing, according to the District Sentinel.

While questioning Andrew Smith, a counsel for the Consumer Data Industry Association, Sen. John Kennedy, R-La., criticized how credit reporting agencies obtain their customer data to turn a profit.

“Your clients basically take my data — personal information about me — without my permission and as a business model they sell it to businesses. I am not compensated,” Kennedy said, according to The Hill.

He continued: “If they lose my data as Equifax did, or if someone submits to them data that is an error that undermines my credit score, the bureaus have no obligation or interest right now to work with me to try to get the credit score correct.”

Also testifying at the hearing was Marc Rotenberg, the President of the Electronic Privacy Information Center, who said credit agencies should be prohibited from sharing data unless customers opt in.

“No one is objecting to the provision of credit to American consumers. But it’s the consumer who is initiating the commercial transaction,” Rotenberg said. “It’s the consumer who is seeking the mortgage or the loan. The consumer should decide when to release that credit record information to others.”

In September, Warren and Sen. Brian Schatz, D-Hawaii, introduced legislation that would put stronger regulations on how credit reporting agencies handle personal data.

“Credit reporting agencies like Equifax make billions of dollars collecting and selling personal data about consumers without their consent, and then make consumers pay if they want to stop the sharing of their own data,” Warren said in a press release. “Our bill gives consumers more control over their own personal data and prohibits companies like Equifax from charging consumers for freezing and unfreezing access to their credit files.”


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