Abstract: Consumer Credit Reporting and the Origins of the Modern Data Broker Industry in the United States

Josh Lauer

Abstract

In 2013 a Senate hearing convened to address a new threat to American privacy: consumer data brokers. The hearing, headed by Senator Jay Rockefeller, drew attention to these shadowy firms and their largely unregulated data-gathering practices. Significantly, three of the nine firms that Rockefeller singled out for investigation were credit bureaus: Equifax, Experian, and TransUnion. This paper examines the key role that consumer credit bureaus played in the development of the modern data broker industry. Though new technologies have allowed 21st-century data brokers to flourish, the underlying logic of this industry – the wholesale collection and monetization of consumer information – emerged much earlier. This paper shows how credit bureaus, long before computerization, began to mine their rich stores of personal and financial information for new sources of revenue. During the 1930s credit bureaus developed specialized reports for insurance companies, employers, and landlords, and by the 1950s a growing number offered pre-screening services and sold promotional lists. In their efforts to repackage and sell the “by-products” of their main business, the credit reporting industry discovered the vast surplus value of consumer information and established a model for future data brokers in the United States.