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Over Easy: Surprise! We’re Being Scored!

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Our lives are an open book, and we may be the only ones who don’t know it!

We all know about FICO scores by credit agencies, and if we’re smart we download and examine our free reports annually. But did we know we also have a social media influence score (klout score)? How about a Job Security score? Fraud Risk score? We may even a Brand Name Medicine Propensity score that indicates how likely we’ll purchase generic drugs.

A new report by the World Privacy Forum, The Scoring of America: How Secret Consumer Scores Threaten Your Privacy and Your Future, describes in detail how we’re scored and how threatening it is, or could be. (A PDF of the 90-page report is available at the above link.)

Among American adults, each individual with a credit or debit card or a bank account is likely to be the subject of one or more scores.  Many individuals signed up under the Affordable Care Act have a score. Individuals who buy airline tickets have a score.
Individuals who make non-cash purchases at large retail stores likely have a score. Scores such as the medication adherence score, the health risk score, the consumer
profitability score, the job security score, collection and recovery scores, frailty scores, energy people meter scores, modeled credit scores, youth delinquency score, fraud
scores, casino gaming propensity score, and brand name medicine propensity scores are among the consumer scores that score, rank, describe, and predict the actions of

We are familiar with credit scores if we’ve ever applied for a mortgage or auto loan, and their use is no longer a secret. But like the infamous metadata, these other nearly invisible (to us) consumer scores are derived from our personal data to predict our health, our spending habits, and even our likelihood of identity theft.

A Wall Street Journal investigation in December 2012 found that the Staples, Inc. website displayed different prices to people after considering the person’s distance from a rival brick-and-mortar store (OfficeMax or Office Depot). You may have heard of Target’s ability to predict whether a woman is pregnant using information gleaned from her shopping habits. After shopping at Target, a young woman began receiving mail at her father’s house with ads for diapers, baby clothing, cribs and other baby-specific products. This is how her father learned that the young woman was pregnant.

The World Privacy Forum report estimates that there are hundreds, probably thousands of predictive scores. A few examples cited in the report:

  • Job security score: Predicts future income and capacity to pay.
  • Churn score: Predicts when customers will move their business or account to another merchant.
  • Brand name medicine propensity score: Predicts if you will buy generics or brand name medications.
  • Fraud score: Predicts if a customer is not who they claim to be or may be up to some mischief.

The Federal Trade Commission has been looking into predictive consumer scoring, with the goal of studying what is happening now and may be coming, what the potential privacy concerns are, and what regulations may be needed. Privacy advocates would like to see federal regulators establish rules for the use of consumer scores, to make sure they are not being used unfairly or to discriminate. They believe the big data companies should be required to take steps to ensure that information is accurate, and to disclose that a predictive score was used, if that score adversely impacts someone’s employment, credit, insurance or any significant consumer opportunity.

No surprise that “big data” doesn’t think regulation is needed. They claim that they analyze and use the marketing information to offer people relevant ads and money-saving deals, and if there are errors, people will just get ads and offers that aren’t relevant. They downplay discriminatory risks associated with predictive scoring, claiming that their companies use their analytic technologies for advertising purposes, and not to determine whether a consumer qualifies for a particular product. Companies also point to existing laws, including Fair Credit Reporting Act (“FCRA”), the Health Insurance Portability and Accountability Act (“HIPAA”) and the Graham-Leach-Bliley Act (“GLBA”), to claim there’s sufficient regulation of predictive analysis. They want greater industry self-regulation instead of new legislation. We all know how that works out.

From the NBC website, “Here’s the Real Score: Big Data Knows Everything About You!

Even if the decision is made to regulate this industry—and that is far from certain—it won’t be easy to do. The World Privacy Forum estimates that there are now more than 4,000 databases collecting and analyzing every bit of information they can gather on us.

There are ways to stop some of this data collection. You can use Web browsers that don’t track where you go, or you can shop with cash. You could even stop sharing all of your personal information on social media—fair game for the data collectors.

But there are so many sources of personal information beyond your control that it’s really a losing battle. Your data are now a commodity, bought and sold, whether you like it or not.

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I retired from the University of Notre Dame in the Office of Information Technology in 2010. I'm divorced, with two grown children and 8 grandchildren. I'm a lifelong liberal and a "nonbeliever."