In a new report addressing geolocation and privacy, the Government Accountability Office found that most consumers are unaware that companies use their location information and recommended that the government take action to combat the problem.

The “Mobile Device Location Data” report analyzed the privacy risks posed by the collection and sharing of location data. The GAO study was conducted from December 2011 to September 2012 and examined the practices of 11 mobile companies, including carriers, manufacturers, creators of apps for Facebook, and developers of operating systems.

The GAO reviewed how mobile industry companies collect location data, why they share this data, and how those actions affect consumers. The report also looked at the actions taken by private-sector entities to protect consumers’ privacy and ensure the security of location data, as well as the actions taken by federal agencies to determine whether any additional federal efforts are needed.

While industry associations and privacy advocates have developed recommended practices – like clear disclosures to consumers about the collection and sharing of their data and the identification of third parties that receive location data – the GAO found that “companies have not consistently implemented such practices.”

According to the report, “Companies GAO examined disclosed in their privacy policies that the companies were collecting consumers’ location data, but did not clearly state how the companies were using these data or what third parties they may share them with.” Some policies stated that they shared location data with third parties, but were “vague about which types of companies these were and why they were sharing the data.”

“Lacking clear information, consumers faced with making a decision about whether to allow companies to collect, use, and share data on their location would be unable to effectively judge whether the uses of their location data might violate their privacy,” according to the report.

Therefore, the GAO recommended that government agencies take action. It advised the Department of Commerce’s National Telecommunications and Information Administration, which is currently conducting a series of meetings on the issue, to “outline specific goals, milestones, and performance measures for its process to develop industry codes of conduct.” Further, the Federal Trade Commission should “consider issuing guidance on mobile companies’ appropriate actions to protect location data privacy,” which it could then enforce.

To read the GAO report, click here.

Why it matters: The GAO report was requested by Sen. Al Franken (D-Minn.), who has cosponsored legislation on the issue. In a statement, Sen. Franken said the report “clearly shows that mobile industry companies often fail to respect” consumers’ privacy rights, and that it makes a “strong case” for legislation. “My Location Privacy Protection Act would require companies to get your permission before they get your location information or share it with third parties – a common sense solution to make sure that consumers’ privacy is protected.”