Lawmakers call for FTC probe into top financial data aggregator

Lawmakers call for FTC probe into top financial data aggregator
© Aaron Schwartz

A group of lawmakers on Friday called on the Federal Trade Commission (FTC) to investigate one of the top financial data aggregators in the U.S., questioning whether it is collecting reams of sensitive information on Americans without adequate consent. 

Sens. Ron WydenRonald (Ron) Lee WydenThe Hill's 12:30 Report: Democratic proposal to extend 0 unemployment checks Senate Democrats offer plan to extend added jobless benefits during pandemic Hillicon Valley: Facebook takes down 'boogaloo' network after pressure | Election security measure pulled from Senate bill | FCC officially designating Huawei, ZTE as threats MORE (D-Ore.) and Sherrod BrownSherrod Campbell BrownSenate Dems request briefing on Russian bounty wire transfers On The Money: Mnuchin, Powell differ over how soon economy will recover | Millions fear eviction without more aid from Congress | IRS chief pledges to work on tax code's role in racial wealth disparities IRS chief pledges to work with Congress on examining tax code's role in racial wealth disparities MORE (D-Ohio), alongside Rep. Anna EshooAnna Georges EshooShort-term health plans leave consumers on the hook for massive medical costs, investigation finds Exclusive investigation on the coronavirus pandemic: Where was Congress? Hillicon Valley: Conspiracy theories run rampant online amid Floyd protests | First lawsuit filed against Trump social media order | Snapchat to no longer promote Trump's account MORE (D-Calif.), said the FTC should probe Envestnet, a huge financial services company that owns the largest consumer financial data aggregator in the U.S. The probe comes as Congress has intensified its scrutiny of large corporations collecting personal information on nearly every American. 

“The consumer data that Envestnet collects and sells is highly sensitive," Wyden, Brown and Eshoo wrote in a letter to the FTC. "Consumers’ credit and debit card transactions can reveal information about their health, sexuality, religion, political views, and many other personal details."

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"And the more often that consumers’ personal information is bought and sold, the greater the risk that it could be the subject of a data breach," they added.

Envestnet said in a statement Friday that it "is dedicated to improving the financial lives of consumers and does so in compliance with law and regulations and in accordance with leading industry practices for data security, regulatory compliance and privacy." 

"We welcome informed discussion about ways to further data privacy as we continue to build on our pioneering work with financial institutions, regulators and other industry experts," the company said, noting that it scrubs any personal identifiers from its financial data.

Envestnet owns Yodlee, a financial data aggregator used by 15 of the 20 largest banks in the country to offer personal finance tools for customers. Lawmakers are raising concerns that customers aren't given proper notice that Envestnet will collect and sell access to their information.

"Envestnet does not inform consumers that it is collecting and selling their personal financial data," they wrote. "Instead, Envestnet only asks its partners, such as banks, to disclose this information to consumers in their terms and conditions or privacy policy. That is not sufficient protection for users."

Democrats are asking the FTC to look into whether Envestnet's practices are unfair, deceptive or abusive.

Yodlee says it anonymizes the financial data it sells, meaning it does not identify individuals associated with their personal information. But studies have shown that it is relatively easy to "de-anonymize" data, drawing back the information to individual people.

Updated at 2:54 p.m.