• by Wendy Davis  @wendyndavis, December 18, 2013

The head of the Senate Commerce Committee said on Wednesday that he is “revolted” when data brokers offer to sell lists of “genetic disease sufferers,” “payday loan responders” and other vulnerable groups.

“This is a very serious situation,” Sen. Jay Rockefeller (D-W.Va.) said at the conclusion of Wednesday's committee hearing about data brokers' practices.

While Rockefeller criticized data brokers on a few fronts -- including their lack of transparency to consumers -- he seemed especially troubled by the idea that some data brokers classify people based on financial or medical weaknesses. Such classifications “seem tailor made to businesses that seek to take advantage of consumers,” he said.

Earlier on Wednesday, Rockefeller released a critical majority staff report about data brokers, which said that some data brokers offer to sell lists of vulnerable consumers -- such as people who fall into categories like “Rural and Barely Making It,” “Ethnic Second-City Strugglers,” and “Credit Crunched: City Families.”

The report notes that one data broker sells a tool to identify “under-banked consumers” -- including widows and military personnel -- who might accept high-interest payday loans. The staff report also said some data brokers segments consumers by health conditions, like multiple sclerosis, cancer and Parkinson's disease.

While Rockefeller had harsh words for those practices, he didn't indicate that he was planning to propose specific legislation. Instead, he said that he still wants more information from some of the biggest players, which have so far refused to answer all of the lawmaker's questions.

“Several of the largest data brokers -- Acxiom, Epsilon, and Experian -- are continuing to resist my oversight. To date, they have not given me complete answers about where they get their consumer data, and to whom they sell it,” he said in an opening statement. “I am putting these three companies on notice today that I am not satisfied with their responses and am considering further steps I can take to get this information.”

Experian senior vice president Tony Hadley said at the hearing that the company considered its client list proprietary. When Rockefeller pressed Hadley for more information, he said that lists of economically vulnerable customers were purchased by governmental agencies, so they could identify people who might be eligible for assistance.

Rockefeller wasn't satisfied with that response. “You selectively named some of your clients,” he said. Hadley responded that government clients were a matter of public record.

Federal Trade Commission consumer protection head Jessica Rich, who testified at the hearing, said the agency has called for legislation requiring data brokers to give consumers access to data about them.

But Sen. John Thune (R-S.Dak.) touted the benefits of the data broker industry in his opening statement. He said that data-driven marketing “can lower the cost of products and services because businesses can target marketing more precisely.” Thune added: “Data-driven marketing is one important reason that many of us are able to use search engines and our email accounts for free.”