Employment verification and sensitive data security startup Certree accused data brokers including Equifax and Experian of having amassed databases full of payroll records on most Americans and “the near-ubiquitous collection and sale of payroll data, including personal identifiable information,” according to a letter seen by PYMNTS and sent to FTC Chair Lina Khan from Certree CEO and co-founder Pavan Kochar.
See also: SEC Charges 3 in Connection With 2017 Equifax Data Breach
“Using their historically dominant positions in the credit reporting industry, companies like Equifax and Experian have collected hundreds of millions of payroll records on everyday American consumers, which they sell to lenders, landlords, debt collectors, and other customers as part of their workforce verification services,” Kochar said in the letter.
According to the allegations by Certree, the brokers have more recently effectively turned the market for payroll data into an oligopoly by forming strategic partnerships with HR software firms and cutting deals for exclusive data access.
That business model harmed consumers by limiting choice, reducing privacy, and limiting data security and the business practices from the model stifled innovation and competition, according to the letter.
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“Anytime billions and billions of records are amassed there is a tremendous risk of a breach and there is a risk of control – a major risk,” Kochar told PYMNTS.
She said the FTC should investigate because large power brokers shouldn’t be able to amass our data. “It’s about self-sovereignty.”
Certree is urging the regulator to open an investigation under potential violations of Section 5 of the FTC Act.
The Work Number, the payroll verification unit of Equifax, is governed by the Fair Credit Reporting Act (FCRA) and doesn’t release income data without the consumer or employee’s authorization, an Equifax spokesperson told PYMNTS.
PYMNTS has reached out to Experian and the FTC for comment.
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