Consumer Protection Watchdog Spies On You, Too

Consumer Protection Watchdog Spies On You, Too

By |July 5th, 2013|

cfpbThe Consumer Financial Protection Bureau is spending millions to get your credit records – without your permission.

You may have heard that the NSA is spying on everyone, collecting pretty much every scrap of data it can get. Cell phone records, emails, social media posts – the works. The guy who spilled the beans on that is in hiding, and the US is pretty keen on getting him back for a big-time trial.

Some say it’s illegal, others say it’s necessary to keep us safe from bad people who want to do bad things to us. I’m simply creeped out by it, but it would be terrific if the NSA would offer a backup and recovery service for my data as well.

The NSA exists for matters of national security, so it’s not out of the realm of possibility that this program – called PRISM, according to reports – exists.

But there’s also news about the federal consumer protection watchdog spying on us. Too bad not many people are talking about it.

Consumer Financial Protection Bureau Spy Program?

According to records received by Judicial Watch as a result of a Freedom of Information Act request, the Consumer Financial Protection Bureau has spent about $8 million of dollars collecting and analyzing Americans’ financial transactions.

Some of that data was collected without your knowledge.

There are contracts with credit reporting agencies and accounting firms to gather, store, and share credit card data.

There’s a contract for $2.9 million paid to Deloitte Consulting LLP for software instruction.

Indefinite Delivery, Indefinite Quantity

According to the documents obtained by Judicial Watch, there’s an “indefinite delivery, indefinite quantity” contract with Experian to track daily consumer habits.

The bureau’s stated objective is to acquire and maintain  a random, nationally-representative sample of credit information on consumers for use in a variety of policy research projects. According to Bank Credit News:

Additionally, the documents showed a contractual provision stipulating that a contractor would be able to obtain confidential, proprietary or personally identifiable information that the contractor “may be required to share…with additional government entities as directed by the Contracting Officer’s Representative.”

This sounds pretty bad to me, folks.

No Warrant, No Permissible Purpose

Usually, the government needs a warrant for any search and seizure – including information about you.

We’ve talked about how nosy neighbors can’t get your credit reports or related credit information. You need to have a permissible purpose.

Granted, the CFPB may be obtaining this information for a valid purpose. But without permission or a permissible purpose as defined by the Fair Credit Reporting Act, it’s not legal.

More to the point, your data may be shared with those additional government entities. I’m not sure what that means, but theoretically that means the US Department of Justice can get your credit card statements in connection with your bankruptcy filing. Or the IRS could do an impromptu audit of your tax returns without telling you.

Cash Is King?

I know cards are convenient, but the privacy-minded among us may do well to use cash for their purchases.

It doesn’t matter whether you’ve got anything to hide. Your data and information should be yours to control as you see fit.

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About the Author:

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.