Your Salary Information Can Be Sold to Debt Collectors
Think your salary is a closely kept secret between you, your boss and your tax attorney? Think again. Equifax, one of the three major credit reporting companies, has created a massive database that contains workers’ salaries and employment information — some of which is sold to debt collectors, according to an NBC News report.
The personal disclosures come through the Work Number, an Equifax company that solicits employers for human resources information like employment history, compensation and other data. The Work Number has about 190 million sometimes-overlapping records with information on about a third of the adults in the nation, according to the report. Firms who are hiring new employees can use the company as a one-stop shop to verify an applicant’s history.
Equifax acknowledged that it sells the data, while claiming that it does not share actual salary information with debt collectors, only with creditors themselves. “In all cases, these entities must have a permissible purpose to request employment information,” a company spokesperson said to NBC. “Collections agencies are not provided salary information.”
The credit reporting agency has faced other privacy complaints, and last year paid nearly $400,000 to settle charges filed by the Federal Trade Commission that it improperly sold information about homeowners who were behind on their mortgages.
While the revelations about shared salary information are disquieting to privacy advocates, Equifax’s activities all appear to fall squarely within what is permissible by law under the Fair Credit Reporting Act.
“The Fair Credit Reporting Act restricts the use of personal financial information,” says Oscar Marquis of Oscar Marquis & Associates, a law firm specializing in privacy and consumer reporting. “Disclosure is restricted to permissible purposes. Permissible purposes typically deal with a consumer’s application for some sort of benefit like credit, insurance or other transaction that the consumer initiates.”
If a consumer applies for credit for something like a student loan, an auto loan or a mortgage, they give the potential creditor permission to check out their credit history in order to decide if the loan should be extended, and at what rate. The access continues over the life of the loan.
“The permissible purposes is in connection to the extension of a credit review or credit that will come,” Marquis says. “The creditor or a party acting on behalf of the creditor has access if they want to collect on the account, or if it’s an existing account and they want to review it.”
The thought of W2 numbers floating around can be nerve-wracking, but Marquis points out that it’s part of a bundle of financial information that helps creditors make sound and thorough decisions about where to lend money. “It’s used to benefit consumers because it helps you get credit, employment or insurance if you’re a good risk,”the attorney says. “Those that are a bad risk will have harder time, but that’s good for those who have a good risk because their rates will be less.”