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Digital Data and Consumer Protection: Ensuring a Fair and Equitable Financial Marketplace
Webcast from release event for Frank Pasquale's book, "Black Box Society," Monday 11 May 2015, 9AM-12 PM Noon — Please scroll forward: The footage begins at 33 min. 38 seconds.
A Project of US PIRG Education Fund with the Center for Digital Democracy
Latest Event: FinTech and Consumers
Watch for updates and links to materials discussed at the 8 May FinTech and Consumers event. Here is a link to the updated (May 7) background paper: FinTech and Consumers.
Past Event: FinTech and Big Data: 6 December 2016
On 6 December 2016 we convened 45 consumer, civil rights, small business and other leaders to discuss recent Fintech developments, including the implications of a proposal by the U.S. Office of the Comptroller of the Currency to allow fintech firms to organize under a special charter under the National Bank Act that would provide them with many of the powers of national banks to evade state law consumer protections even though they aren't banks and aren't subject to the same responsibilities of banks. Here is the event home page with more information.
Click here to learn more about the project's Monday, 1 May 2015 event with author and professor Frank Pasquale discussed his book "The Black Box Society," on the growing use of secret algorithms to categorize consumers.
About this project: American consumers face new challenges and opportunities to their financial security as our economy is transformed by the convergence of digital media with “Big Data” technologies. Our use of mobile phones, social media, “apps,” and other online tools have created new ways for us to spend, save and borrow money. Powerful forces are at work, however, that can undermine a consumer’s ability to make the best choices and may place those already financially at risk even more vulnerable. The digital data-driven economy continually gathers vast amounts of information on individuals, online and offline, which is used to create a “profile” about our spending habits, behavior and our geo-location. These profiles can be “scored”—an invisible measure known only to the marketer and data brokers—that can determine whether we are offered high interest credit cards, payday and for-profit college loans and even what we may pay at retail and grocery stores. The uses of the information can be positive or, absent any regulation or meaningful protections, lead to discrimination, price manipulation or denied opportunity.
Our collected personal information is merged into an ever-expanding database of information that enables firms we may know about and many others we don’t know to engage in personalized high-tech marketing and advertising practices designed to get us—and our families—to continually spend more money. In today’s online world, a consumer can be targeted for offers nearly 24/7, whether we use a mobile phone, computer, or while watching TV.
American consumers do not have meaningful safeguards for these data analytics and digital marketing practices, including both protecting their privacy and preventing misuse of their information to deny economic opportunity. USPIRG Education Fund and Center for Digital Democracy (CDD) are working together to ensure that consumers are treated fairly by this new digital “wild west” financial marketplace.
Case Studies and Reports:
- Online Lead Generation: What You Need to Know to Protect Yourself from Companies in the Business of Secretly Selling You to Predatory Payday and Other Short-term Loan Companies (May 2015)
- Targeting Hispanics for Leads in the Digital Big Data Era (May 2015)
- Private For-Profit Colleges and Online Lead Generation: Private Universities Use Digital Marketing to Target Prospects, Including Veterans, via the Internet (May 2015)
- Big Data Means Big Opportunities and Big Challenges: Promoting Financial Inclusion and Consumer Protection in the “Big Data” Financial Era (March 2014)
Law Review Articles:
Selling Consumers Not Lists: The New World of Digital Decision-Making and the Role of the Fair Credit Reporting Act, Suffolk University Law Review, (December 2013)
Available Video and Webinar Presentations:
Video archive of the “Data, Lending, and Civil Rights” conference at Georgetown University, 8 April 2015, (agenda and information) sponsored by Americans for Financial Reform, The Leadership Conference Education Fund and the Center on Privacy and Technology at Georgetown Law. (Ed Mierzwinski’s panel begins at approximately 2h45m and Ed’s main remarks at approximately 3h2m30sec.)
USPIRG Education Fund and Center for Digital Democracy acknowledge the support of the Ford Foundation, the Annie E. Casey Foundation, the Rose Foundation for Communities and the Environment and the Digital Trust Foundation for support of our research and education work on data and financial opportunity. We thank them for their support but acknowledge that the work, events, reports and investigations are those of the authors and organizations alone, and do not necessarily reflect the opinions of the Foundations.
Licensing: All materials developed under this project are subject to a Creative Commons Attribution 4.0 International license, which allows you to reuse the materials with attribution subject (in part) to the following terms.
- Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
NOTE: The project may not hold the rights to all images (which we may have purchased for limited uses) or report designs (which may be held by the designers.
For this project's content, this licensing notice supercedes any alternate copyright or older Creative Commons notices that may appear elsewhere on these websites.
Our response to Equifax paying a $650 million penalty for exposing the social security numbers of 148 million Americans to identity theft.
With the CFPB under new management less interested in consumer protection and law enforcement, our new report highlights steps states, counties and cities are taking to protect consumers better. Coincidentally, the report was completed on the same day that the U.S. Senate confirmed Kathy Kraninger to a 5-year term as CFPB director. She replaces her mentor, the OMB director Mick Mulvaney, who has been serving as acting CFPB director for just over a year.
We've joined leading consumer, civil rights, labor and older American organizations in a comment letter urging the Securities and Exchange Commission (SEC) to strengthen its proposed "Regulation Best Interest" intended to ensure that all broker-dealers and other individuals and firms offering investment advice act do so in a fiduciary capacity, or in the best interest of their investor-clients. (Right now, it doesn't).
We joined leading consumer organizations to criticize the national bank regulator OCC's new proposal to charter non-bank fintech companies. We called it both illegal and a gateway for online predatory lenders to enter states where high-cost payday lending is banned. Leading state bank regulatory officials also opposed the OCC move, which is also one of the recommendations in a controversial Treasury Department report released the same day.
News Release: Our latest report based on the CFPB's public Consumer Complaint database reviews the most-complained about debt collectors. Funny, a new CFPB complaint "snapshot" does not. The report comes as the CFPB's acting director threatens to make the database non-public. If the CFPB both shuts down the public database and continues to issue industry-friendly reports that don’t give out any real information, the public and marketplace harm is even greater.
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