Think data privacy has no teeth? What happens when a company collects your background information and sells it to debt collectors? Just ask LexisNexis, who just settled this exact matter for $13.5M in a class-action suit brought by over 30,000 plaintiffs. Welcome to the new world of Big Data litigation!
Here’s the skinny: without admitting any wrongdoing, LexisNexis agreed to pay $13.5M to settle a class action brought by over 30,000 plaintiffs whom accused the company of violating consumer protection laws. The plaintiffs alleged that LexisNexis sold their background information to debt collectors in a dispute centered on whether LexisNexis’ Accurint reports, used as skip tracing tools by debt collectors to track down consumers, were “consumer reports” as defined under the Fair Credit Reporting Act.
While the results of a specific report may vary by available data, Accurint reports contain a wealth of information. Through these reports many categories of public records are available from judgments, liens and bankruptcy information to criminal records. Additionally, licensing details from driving to flying an aircraft, real and personal property ownership, and a complete list of addresses and telephone numbers can be pulled. In the Joint Motion to Approve Settlement, LexisNexis has additionally agreed to separate its sale of “Accurint for Collections” reports based on content and use.
According to Law360 (the source that broke the news of this settlement):
“Customers who are granted access to the Collections Decisioning product and services will now be permitted to use the information only if they are able to certify a permissible purpose under [the act],” the motion said. “Consumers will be able to request and review their consumer files, which will display inquiries and omit certain prohibited information. Consumers will be able to make a dispute and defendants will be required to follow reasonable procedures to help assure accuracy.”
In essence, this settlement paved the way for a complete overhaul of the LexisNexis collections products in addition to generating a notable eight digit settlement. As a software engineer turned law student, I predict a rise in data privacy litigation, especially as class action suits, given the rise of Big Data and a growing demand for data responsibility. Many businesses are built on data collection and just as products liability cases have shaped corporate views on product safety, information brokers will be held accountable for the way they handle sensitive consumer data.
Let us know what you think, with the emergence of Big Data, are companies prepared to litigate over the data they collect?