Lawmakers Asks FTC To Probe Data Firm -- WSJ
January 18 2020 - 3:02AM
Dow Jones News
By Ryan Tracy
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 18, 2020).
WASHINGTON -- Financial-data firm Yodlee might be selling
consumers' personal financial data without proper consent, three
lawmakers said in a Friday letter calling on the Federal Trade
Commission to investigate the matter.
The letter opened a new area of potential risk for the company,
which is one of many firms that make money by selling information
about consumers.
Yodlee, a unit of Envestnet Inc., primarily sells software that
aggregates data from consumers' financial accounts. It says the
technology is used by popular mobile-phone apps such as Personal
Capital and by 15 of the 20 largest U.S. banks, including JPMorgan
Chase & Co., reaching more than 25 million users globally.
In a statement, the company said it complies with "law and
regulations and in accordance with leading industry practices for
data security and privacy."
Personal Capital said it doesn't permit Yodlee "to sell our
customer data in any form even if it is anonymized." JPMorgan
declined to comment.
The letter from Sen. Ron Wyden (D., Ore.), Sen. Sherrod Brown
(D., Ohio) and Rep. Anna Eshoo (D., Calif.) asked the FTC to
investigate whether the company's practices constitute unfair,
deceptive or abusive behavior.
If the commission determined that was the case, the firm could
face financial penalties or other sanctions. The FTC declined to
comment.
In addition to collecting data so that consumers can easily view
their financial activity in one place, the company also sells
transaction and other data to brokers, who in turn sell it to
investors looking for trends in consumer purchasing.
"Consumers' credit and debit card transactions can reveal
information about their health, sexuality, religion, political
views, and many other personal details," the lawmakers' letter
said. "Consumers generally have no idea of the risks to their
privacy that Envestnet is imposing on them."
Yodlee's website says that "when an investor engages with a
fiduciary advisor, the investor permissions the advisor and the
supporting institution(s) to see their data." Yodlee "never sells
data that identifies individuals" and scrubs data of personally
identifiable information before selling it, it says.
Even if banks or personal-finance apps are notifying consumers
that their data may be sold in this way, Yodlee "should not put the
burden on consumers to locate a notice buried in small print," the
lawmakers said. "The FTC has made it clear that companies may not
hide important facts about how consumer data is collected or shared
in the small print of a privacy policy."
The lawmakers noted that anonymous data doesn't always stay that
way, even when companies remove names, Social Security numbers, and
other identifying information. Mr. Wyden's office cited a paper,
published in the journal Science in 2015, in which academics
studied supposedly anonymized data on 1.1 million people's
credit-card transactions and were able to identify 90% of the
individuals.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
January 18, 2020 02:47 ET (07:47 GMT)
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