With data brokers selling lists of alcoholics to big business, the feds have some thinking to do

The power of data helps Facebook find our friends and Netflix choose our movies but, as recent reports make clear, there’s also a looming dark side to the growing consumer data economy.

60 Minutes, for instance, took a closer look this past weekend at how data brokers are tapping a growing number of sources to compile evermore specialized lists. Many of the lists, which are typically sold to marketers, cover some very private topics:

A Connecticut data broker called “Statlistics” advertises lists of gay and lesbian adults and “Response Solutions” — people suffering from bipolar disorder.

“Paramount Lists” operates out of this building in Erie, Pa., and offers lists of people with alcohol, sexual and gambling addictions and people desperate to get out of debt.

A Chicago company, “Exact Data,” is brokering the names of people who had a sexually transmitted disease, as well as lists of people who have purchased adult material and sex toys.

Meanwhile, a new investigation into license plate scanning describes how enterprising individuals are strapping cameras in order to troll parking lots for cars to repossess. In doing so, the camera-equipped cars hoover up every license plate they see, while adding time and location data; the drivers then relay this data to brokers like Digital Recognition Network of Texas, which claims to collect plate scans of 40 percent of all US vehicles annually.

The scope of this private data collection is all the more remarkable since the private companies that collect it are not subject to the obligations to delete records that are imposed on many government and law enforcement agencies.

So is it time for the government to step in and slap down some more rules for what private brokers can do with our data? Or would doing so only harm a growing part of the economy without improving privacy?

Right now, the Federal Trade Commission is conducting an investigation of nine major brokers — Acxiom, Corelogic, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf, and Recorded Future — to see how they are using consumer information.

To get a better idea of what the agency is asking, and what type of actions it might take, Gigaom has invited the FTC’s deputy director of consumer protection, Daniel Kaufman, to come to New York City next week and explain the process. We will be reporting on what he has to say on March 19.

If you want hear firsthand, we have a handful of tickets left for Structure Data on March 19-20 where Kaufman and others will be sharing the latest from the frontiers of big data.

Feature image from Thinkstock/Comstock