Written by Barish Dev
OAKLAND, CA (Reuters) – The US Federal Trade Commission should investigate how data brokers including Equifax Company (NYSE ๐ and Experian plc (LON ๐ I collected the payroll records of most Americans, which was urged by a small competitor in a letter to the agency on Monday seen by Reuters.
For decades, companies like Equifax have obtained employee work records and compensation data from employers to help lenders, landlords, hiring managers and other clients conduct background checks on individuals. But such large databases are vulnerable to theft and error, and workers are sometimes surprised to have their records listed, according to privacy activists.
Equifax said it follows all laws and welcomes additional voices in the industry.
Experian (OTC ๐ has not responded to requests for comment.
In the letter to the Federal Trade Commission (FTC), San Mateo, a California-based Startup Certree, stated that Equifax and Experian are offering financial incentives such as a slice of their revenue to employers for exclusive access to payroll data. Equifax also has deals with payroll software vendors that help employers process payroll checks. The letter describes the agreements as non-competitive and potentially illegal.
โThis business model has caused unique harms to consumer privacy, data security, choice, and financial security, and has led to business practices that stifle innovation and competition,โ Certree CEO Pavan Kochar wrote.
The Federal Trade Commission declined to comment. Under new president Lina Khan, the agency has sought increased enforcement on grounds of competition and privacy.
Equifax in March described its Workforce Solutions unit, which included payroll data of 105 million people, as “the fastest growing, highest-margin and most valuable business,” with revenue of just over $2 billion.
The company said that workers can view or block access to records and that it has improved data security.
Experian’s employment verification service was launched last year.
Certree, which debuted last year, sells software to employers that enables millions of workers to manage and share their employment records through a private digital vault. But in the letter, Certree said the exclusive deals posed “tremendous hurdles”.
