Privacy concerns escalate : Without these protections, data brokers can continue collecting and selling Americans’ sensitive personal information with minimal oversight. This data often includes Social Security numbers, financial records, location histories, and purchase patterns, leaving consumers vulnerable to identity theft and fraud. “Demographic groups already underserved by mainstream financial services”, low-income earners, elderly individuals, and racial minorities”, are now most exposed to data misuse,” Gogia said. “The most vulnerable demographics could be minorities, seniors, children, or families of military,” Shah added. Security breaches at data broker companies have already demonstrated these risks. In the past year alone, major data breaches exposed millions of Social Security numbers and location data tracking people’s movements. Privacy advocates argue that the collection and sale of personal data without explicit consent violates fundamental privacy rights. The absence of federal regulations means consumers often have no way to know who has their data or how it’s being used. Impact on businesses and consumers : The data broker industry, valued at billions of dollars, has faced increasing scrutiny. The Federal Trade Commission has taken action against several data brokers in 2024, banning some from collecting and sharing data without permission. With the federal rule withdrawn, attention shifts to state-level regulations, creating new challenges for businesses. “Without a national standard, the compliance landscape is fractured, exposing enterprises to both reputational and legal harm across state lines,” Gogia explained. Shah echoed these concerns: “The lack of strong federal regulation will increase the burden of protecting sensitive information for enterprises. This will increase compliance costs, especially for companies operating across different states.” Several states have already developed their own frameworks for data privacy protection. “Some states with more solid privacy laws, such as California, Colorado, and Utah, will remain somewhat protected,” Shah noted. However, he added that “consumers need to be cognizant of those laws and their rights.” For consumers, the withdrawal shifts the burden of protection to individuals. “Until the CFPB revisits data broker regulation, consumers remain the last line of defence against identity exploitation,” said Gogia. “Digital literacy is no longer optional”, it’s survival infrastructure in today’s data economy.”
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