WASHINGTON (1/14/16)--Using big data can bring benefits for consumers but also lead to outcomes that may be exclusionary, according to a report released by the Federal Trade Commission (FTC). Titled “Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues,” the report examines how data is used after being collected and analyzed.
Big data can help credit unions grasp member behavior and help improve an organization, according to a study released last month by the Filene Research Institute. Affinity Plus FCU of St. Paul, Minn. used big data to help its members save $1 million in just 13 days.
The FTC’s report highlights a number of uses of big data that are providing benefits to underserved populations, including increased educational opportunities and access to credit through nontraditional methods.
In addition, it looks at possible risks that could result from biases or inaccuracies about certain groups, including more individuals mistakenly denied opportunities, exposing sensitive information, creating or reinforcing existing disparities, assisting in the targeting of vulnerable consumers for fraud and weakening the effectiveness of consumer choice.
Laws such as the Fair Credit Reporting Act, FTC act and equal opportunity laws are addressed in the context of big data, especially in regards to possible issues of discrimination or exclusion. It also provides a range of questions for businesses to consider when they examine whether their big data programs comply with these laws.
The report draws on information from the FTC’s 2014 workshop, “Big Data: A Tool for Inclusion or Exclusion?,” as well as the commission’s seminar on alternative scoring products.