wildercb/PrivacyTextBooks1.2 · Datasets at Hugging Face

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mistakes.
Of course, Equifax had made a prior statement about the quality of its
data security, a statement similar to that made by many companies:
We are committed to protecting the security of your information through procedures and
technologies designed for this purpose by taking these steps: We limit access to your personal
information to employees having a reasonable need to access this information to provide
products and services to you . . . We have reasonable physical, technical, and procedural
safeguards to help protect your personal information.37
Statements like this are essentially meaningless to people who receive them.
Everyone says they are being reasonable about security.
The FTC charged Equifax for failing to live up to its promise of
reasonable security. Along with 50 states and territories, the FTC reached a
settlement with Equifax, which agreed to pay $575 million (and potentially
up to $700 million). This money would compensate people who suffered
harm as well as pay for up to 10 years of free credit monitoring, in addition
to other things. The irony is that it was users of Equifax’s credit monitoring
who were victimized by the breach; they would receive credit monitoring
for the data compromised when they were using credit monitoring.
This particular breach involved personal data on many people who were
customers of Equifax, using its credit monitoring and identity theft
protection services. But most people whose data Equifax maintains are not
customers. These people often have never even heard of Equifax, let alone
had an account with them.
The primary business of the consumer reporting agencies is credit
reporting. Their main customers aren’t the people they are maintaining data
about. Instead, their customers are creditors or others who want to obtain
information about people. The law allows consumer reporting agencies to
collect data about people and to report on their creditworthiness without
people’s consent. People can’t even opt out.
ChoicePoint is another example of this type of actor. This was a
company that had gathered extensive dossiers about individuals, mostly
without their knowledge or consent. The people whose data it gathered,
maintained, and analyzed weren’t its customers. ChoicePoint’s customers
were other organizations.
The fact that people affected by breaches are often not customers
presents a big problem. There isn’t a sufficient market mechanism to
incentivize these companies to devote extensive resources to protecting the
security of personal data.
If you don’t like the way that your bank treats you, you can take your
money to another bank. If your doctor breaches your confidentiality, you
can go to another doctor. But if a consumer reporting agency is careless
with your data, you can’t do anything. It can still keep and use your data.
Consumer reporting agencies began developing as early as the late
1870s.38 With the help of computers, from the 1960s on, they grew into
behemoths, processing torrents of data about hundreds of millions of
people. Consumer reports contain financial information, bankruptcy filings,
judgments and liens, mortgage foreclosures, checking accounts, and
information from other creditors, including how well you paid back your
debts in the past. Some companies also prepare investigative consumer
reports, which supplement the credit report with information about an
individual’s character and lifestyle.
Before they were regulated by law, credit reporting agencies were
notorious for their abuses. Credit reports often contained numerous errors.
People had no right to check the accuracy of their credit reports or even see
them. If people wanted to dispute something on their credit reports, there
was often nobody they could call for help. A parade of complaints of abuse
and lack of responsiveness of consumer reporting agencies sparked
Congress to pass the Fair Credit Reporting Act (FCRA) in 1970.39
FCRA provides a set of rights to people in their credit reports. People
have a right to access their credit reports, challenge inaccuracies in their
credit reports, and consent for their credit reports be obtained for
employment purposes.40
The law is good in many respects, but an incentive problem remains.
Legally mandated requirements are never administered with the same zeal
as profit-motivated endeavors. And, without robust enforcement of existing
rules, there isn’t much incentive for companies to follow the rules.
Consumer reporting agencies such as Equifax, Experian, and
TransUnion process lots of data. Instead of holding these companies
responsible if they make a mistake, courts often act as apologists for these
companies by giving them greater leeway to make mistakes because of their
vast size. The business model of these companies is to keep costs low and
do things fast and at a huge volume. This isn’t just the business model of
consumer reporting agencies; it’s increasingly the business model of many
companies, especially online service platforms. Automate as much as
possible, grow to an enormous size, and process a tremendous volume of
data very efficiently.
Consider the case of Sarver v. Experian. In this case Experian reported
incorrectly that Lloyd Sarver had gone bankrupt when he hadn’t. The error
resulted in Sarver being denied a loan from a bank. Sarver sued under the
FCRA, which requires that consumer reporting agencies use “reasonable
procedures to assure maximum possible accuracy.”
The court tossed out the lawsuit. The court concluded that Experian
gathers credit information from about 40,000 sources, and it is stored in a
database “containing approximately 200 million names and addresses and
some 2.6 billion trade lines. . . . The company processes over 50 million
updates to trade information each day.” Because Experian processes so
much data, the court stated, some mistakes are bound happen, and these
mistakes should be forgiven.
Sarver argued there were anomalies in his report that should have alerted
Experian. The court, however, was sympathetic to Experian: “What Sarver
is asking, then, is that each computer-generated report be examined for
anomalous information and, if it is found, an investigation be launched.”
The court concluded that “given the enormous volume of information
Experian processes daily,” Experian shouldn’t have any duty to examine
each person’s data for anomalies.41
Like many courts, the court in Sarver took Experian’s business model as
a given. With this business model, the tradeoffs make sense for a company
like Experian. It must process a tremendous amount of data and doesn’t
want to devote too much time and too many resources to scrutinizing
everyone’s record. But must it have this business model? This business

mistakes.

Of course, Equifax had made a prior statement about the quality of its

data security, a statement similar to that made by many companies:

We are committed to protecting the security of your information through procedures and

technologies designed for this purpose by taking these steps: We limit access to your personal

information to employees having a reasonable need to access this information to provide

products and services to you . . . We have reasonable physical, technical, and procedural

safeguards to help protect your personal information.37

Statements like this are essentially meaningless to people who receive them.

Everyone says they are being reasonable about security.

The FTC charged Equifax for failing to live up to its promise of

reasonable security. Along with 50 states and territories, the FTC reached a

settlement with Equifax, which agreed to pay $575 million (and potentially

up to $700 million). This money would compensate people who suffered

harm as well as pay for up to 10 years of free credit monitoring, in addition

to other things. The irony is that it was users of Equifax’s credit monitoring

who were victimized by the breach; they would receive credit monitoring

for the data compromised when they were using credit monitoring.

This particular breach involved personal data on many people who were

customers of Equifax, using its credit monitoring and identity theft

protection services. But most people whose data Equifax maintains are not

customers. These people often have never even heard of Equifax, let alone

had an account with them.

The primary business of the consumer reporting agencies is credit

reporting. Their main customers aren’t the people they are maintaining data

about. Instead, their customers are creditors or others who want to obtain

information about people. The law allows consumer reporting agencies to

collect data about people and to report on their creditworthiness without

people’s consent. People can’t even opt out.

ChoicePoint is another example of this type of actor. This was a

company that had gathered extensive dossiers about individuals, mostly

without their knowledge or consent. The people whose data it gathered,

maintained, and analyzed weren’t its customers. ChoicePoint’s customers

were other organizations.

The fact that people affected by breaches are often not customers

presents a big problem. There isn’t a sufficient market mechanism to

incentivize these companies to devote extensive resources to protecting the

security of personal data.

If you don’t like the way that your bank treats you, you can take your

money to another bank. If your doctor breaches your confidentiality, you

can go to another doctor. But if a consumer reporting agency is careless

with your data, you can’t do anything. It can still keep and use your data.

Consumer reporting agencies began developing as early as the late

1870s.38 With the help of computers, from the 1960s on, they grew into

behemoths, processing torrents of data about hundreds of millions of

people. Consumer reports contain financial information, bankruptcy filings,

judgments and liens, mortgage foreclosures, checking accounts, and

information from other creditors, including how well you paid back your

debts in the past. Some companies also prepare investigative consumer

reports, which supplement the credit report with information about an

individual’s character and lifestyle.

Before they were regulated by law, credit reporting agencies were

notorious for their abuses. Credit reports often contained numerous errors.

People had no right to check the accuracy of their credit reports or even see

them. If people wanted to dispute something on their credit reports, there

was often nobody they could call for help. A parade of complaints of abuse

and lack of responsiveness of consumer reporting agencies sparked

Congress to pass the Fair Credit Reporting Act (FCRA) in 1970.39

FCRA provides a set of rights to people in their credit reports. People

have a right to access their credit reports, challenge inaccuracies in their

credit reports, and consent for their credit reports be obtained for

employment purposes.40

The law is good in many respects, but an incentive problem remains.

Legally mandated requirements are never administered with the same zeal

as profit-motivated endeavors. And, without robust enforcement of existing

rules, there isn’t much incentive for companies to follow the rules.

Consumer reporting agencies such as Equifax, Experian, and

TransUnion process lots of data. Instead of holding these companies

responsible if they make a mistake, courts often act as apologists for these

companies by giving them greater leeway to make mistakes because of their

vast size. The business model of these companies is to keep costs low and

do things fast and at a huge volume. This isn’t just the business model of

consumer reporting agencies; it’s increasingly the business model of many

companies, especially online service platforms. Automate as much as

possible, grow to an enormous size, and process a tremendous volume of

data very efficiently.

Consider the case of Sarver v. Experian. In this case Experian reported

incorrectly that Lloyd Sarver had gone bankrupt when he hadn’t. The error

resulted in Sarver being denied a loan from a bank. Sarver sued under the

FCRA, which requires that consumer reporting agencies use “reasonable

procedures to assure maximum possible accuracy.”

The court tossed out the lawsuit. The court concluded that Experian

gathers credit information from about 40,000 sources, and it is stored in a

database “containing approximately 200 million names and addresses and

some 2.6 billion trade lines. . . . The company processes over 50 million

updates to trade information each day.” Because Experian processes so

much data, the court stated, some mistakes are bound happen, and these

mistakes should be forgiven.

Sarver argued there were anomalies in his report that should have alerted

Experian. The court, however, was sympathetic to Experian: “What Sarver

is asking, then, is that each computer-generated report be examined for

anomalous information and, if it is found, an investigation be launched.”

The court concluded that “given the enormous volume of information

Experian processes daily,” Experian shouldn’t have any duty to examine

each person’s data for anomalies.41

Like many courts, the court in Sarver took Experian’s business model as

a given. With this business model, the tradeoffs make sense for a company

like Experian. It must process a tremendous amount of data and doesn’t

want to devote too much time and too many resources to scrutinizing

everyone’s record. But must it have this business model? This business