Andrew Smith spoke to Bloomberg Law about the Consumer Financial Protection Bureau's plan to restrict the sale of personal details that is pitting top consumer credit reports against privacy advocates who want to shield such information from business groups who say there are legitimate reasons for sharing it.
Fraud prevention firms cautioned that applying credit reporting protections to credit header data would make it harder to stop scammers and would put consumers at risk.
According to Andrew, online retailers seeking to prevent fraudulent transactions would be barred from using the data because retail sales fraud prevention isn’t covered under the law.
“Today, that retailer could obtain header and other ID to determine risk of fraud in an online transaction,” Andrew said.
Andrew added that because the Fair Credit Reporting Act doesn’t include fraud prevention outside of the credit, employment, or housing application context, it’s unclear whether the CFPB has the power to grant such an exemption. “They can’t write new stuff into the statute,” he said.
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