Equifax just became one of the biggest privacy stories of the year, and January is not even over yet. Bob Sullivan, of the Red Tape Chronicles fame, broke an exclusive story about how Equifax collects salary information as well as employment information which they then sell to debt collectors. The practice is common enough that there are advertisement brochures for what they call The Work Number which boast about how much easier debt collection is with their information.
Sullivan talked with Larry Ponemon, of the Ponemon Institute who summed up my feelings succinctly; "Are you joking? Oh my God, I'm shocked. This is unbelievably scary. I consider payroll information very sensitive and private." I should think we all do. Yet this information seems to be for sale without our consent.
His article goes on to look at legal opinions and explores how something like this could even be possible. One of his sources considered this the biggest privacy breach of all time, disguised as a business practice.
Part of the employment process has to do with contacting previous employers. New jobs want to make sure someone has the proper experience to do a job, and have an idea of the value placed on the employee by another employer. In other words, they want to know what your salary ones. This is the only information that a previous employer can legally disclose, as well as whether or not they would rehire you. But to answer these questions, the company must connect a human resources person, who then must take the time to go over the information. That takes time, costs companies money, and is very inefficient.
Equifax streamlined the process by creating The Work Number. All of this information is part of your credit report, which they can collect by connecting to employers databases, with their permission of course, and aggregate information… including salary information. Sullivan's article claims this represents about 30% of the workforce today, with about one million per month been added.
If an employer is subscribed to The Work Number (in other words, if they pay for the service,) they can simply contact The Work Number to verify employment and salary history on applicants. Yes, this means that they pay Equifax to give Equifax your salary information so Equifax can sell it to someone else. It would seem that Equifax is making out like a bandit here, and Sullivan contends that it is us getting robbed… of our personal information.
Of course, Equifax isn't going to do something like this if they think they can't get away with it legally. The average consumer is under the impression that nobody can access their salary information without their permission. That protection is part of the Fair Credit Reporting Act (FCRA). But the legal opinion Sullivan quotes points to how the FCRA only works one direction. It details how credit information can be used in hiring decisions, but it does not place any restrictions on how employment reports are used for non-employment purposes.
In the end, we see here yet another example of the corporate world taking advantage of loopholes in laws with regards to personal and confidential information, using it in ways we would never knowingly authorize.
There is a bit of good news, though. Sullivan points out that since this information is controlled by the FCRA, and is considered credit information, held by Credit Reporting Agency, you can check the file The Work Number has on you free of charge every year. He also cautions that although you may be able to pull up your history on the web, you may be required to submit a written form first.
But whether or not the information is accurate, privacy minded individuals will still be disturbed that this personal information is just one more piece that is beyond our control.