• by Wendy Davis , Staff Writer @wendyndavis, January 6, 2016

Big Data offers a broad array of potential benefits, including the ability to "create opportunities for low-income and underserved communities," the Federal Trade Commission said in a sweeping report issued Wednesday.

But the FTC also acknowledged concerns that errors in the data, as well as biases in interpretation, could end up harming people with low incomes.

"If big data analytics incorrectly predicts that particular consumers are not good candidates for prime credit offers, educational opportunities, or certain lucrative jobs, such educational opportunities, employment, and credit may never be offered to these consumers," the FTC writes in its 50-page report.

The agency says it will "continue to examine and raise awareness about big data practices that could have a detrimental impact on low-income and underserved populations and promote the use of big data that has a positive impact on such populations."

The FTC also says it intends to monitor the areas where big data practices might violate existing laws, like the Fair Credit Reporting Act (which requires credit reporting agencies to give consumers the ability to correct inaccurate information about themselves) and the Equal Credit Opportunity Act, which prohibits creditors from discriminating against applicants based on factors like race, national origin, religion, sex, marital status and age.

The FTC's paper comes several months after concerns surfaced about the possibility that credit rating agencies would incorporate social media posts into reports.

In October, Will Lansing, chief executive of the Fair Isaac Corporation (FICO), told the Financial Times that the number of times people post on Facebook about being "wasted" might help determine whether they'll pay back loans. That comment sparked much speculation that FICO had started mining data from social media sites; the company later clarified that it doesn't look at social media data when assessing credit-worthiness.

Still, the FTC report addressed that issue by discussing a scenario where financial companies ask credit applicants to provide ZIP codes, along with information about their social media use and shopping behavior.

In the FTC's scenario, all of that information is then sent to an analytics firm, which analyzes the creditworthiness of people in the same zip code with similar social media and shopping behaviors as the consumer" and then provides the analysis to the financial company.

"Because the company is using information about the consumer to generate an analysis of a group that shares some characteristics with the consumer and then is using that analysis to make a decision about the consumer, the Commission would likely regard the analysis to be a consumer report, and FCRA requirements and protections would likely apply," the FTC writes. "In contrast, if a company uses an analytics firm's report simply to inform its general policies, then the Commission would likely not regard the report to be a consumer report."