Personal Information Uses
Who's Using Your Data?

Businesses are discovering more and more personal information uses to increase their revenue. To some, this may not be a big deal. However, to others, the practice of using consumer personal information is of major concern. This practice has expanded tremendously in today's marketplace.

There is a business practice called analytics that is expanding the importance of personal information uses for businesses. Analytics is essentially gathering and analyzing data to make business decisions.

For example, recently I spoke with an executive of a business that sells a service to employers to help them to reduce their human resources costs. They examine the company's work force data including workers compensation claims, employee health insurance claims, number of sick days, weight, smoking status, types of illnesses treated, medication prescribed, marital status, parental status, birth dates, education, and other employee data.

In some instances the employee assistance program data (e.g. employee psychiatric counseling, marital counseling, or drug rehab) is even considered in the analysis. The employees are completely unaware that their personal information is being used for such an analysis.

The data is cross referenced to identify patterns of employee profile types. The purpose of the analysis is to determine profiles of employees most likely to make workers compensation claims, quit their jobs without notice, file sexual harassment claims, take excessive sick days, or make significant health insurance claims that can cost the employer more money. These "high risk" employee profiles are then used as part of their employment screening process and promotion decisions.

The employer justifies the use of such data on the basis that it results in generic profiles for sound business risk decisions, not discrimination purposes. However, if you happen to fall on the wrong side of the "generic" profile, it's difficult to see how it's not discriminating for you. Furthermore, what about the privacy rights of the employees whose personal information was used for the analytics?

Also, consumer personal information uses is on the rise by businesses. Analytics is used by many companies to target consumers for marketing purposes, price products and services, and assess internal risks. Experian offers services and products for small businesses to purchase reports and gain access to their database of 215 million consumers.

Their small business customers are able to cross reference the credit bureau's database of consumer personal information with their own internal data to "profile" consumers to market their products to and to identify the "type" of consumer that is most profitable for them.

Consequently, we are increasingly seeing industry based credit scores growing industry by industry. One example of consumer personal information uses is by insurance companies. They use insurance industry data to cross reference consumer personal information to calculate credit based insurance scores to identify "high risk" drivers or life insurance applicants. The personal credit information may have nothing to do with a driver's risk of an accident. However the insurance scores are used to determine the amount of the insurance premiums for insurance applicants.

So although you may not yet be fully aware of all of the personal information uses affecting you, eventually you experience the affects. Personal information uses is growing and there's no end in sight. So know your rights to protect your personal information and also why it's important to legally improve your credit.

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