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CFP'91 - Equifax

Social Responsibility in the Information Age

David J. Mooney
Equifax Inc.

We are now well into the "Information Age." When John Naisbitt described the last two decades of the 20th century as "The Information Society" in Megatrends, we realized our lives changed. We have found there are great benefits from sharing information; yet we are concerned that we are asked to share too much of our personal information, despite the benefits we receive from doing so. In these circumstances, social responsibility requires constant vigilance and well formulated guidelines.

Nearly four Americans in five (79%) express concern about threats to personal privacy in America today. On the other hand, consumers want the benefits that the use of personal information brings. These are the two major findings of The Equifax Report on Consumers in the Information Age, the first major study of consumer attitudes on privacy in a decade, commissioned by Equifax and conducted in 1990 by Louis Harris and Associates and Dr. Alan Westin of Columbia University. Humphrey Taylor, president of Louis Harris and Associates noted two primary reasons why four out of five Americans feel their privacy is being threatened: continuing public distrust of large institutions and fears about uncontrolled technology.

Computer technology has brought us into this information age, and it has done it well. For the most part, it has been managed responsibly and now instantly provides society with benefits that used to take days or months to obtain. Americans have a thirst for knowledge, and "knowing" is very important. We "know" because people gather information, compile it, format it, and present it to us through a variety of media. We know what the weather will be like in Denver on Thursday before we leave Atlanta on Tuesday; we know our bank balance instantly and get complete statements from our automatic teller machines; we can have a check verified instantly from one state to another; we can gain approval for credit for a new car over the lunch hour; we can make good choices from information we receive on a wide variety of products and services. As consumers, we are able to obtain these benefits because information about us has been gathered, compiled, formatted, and is available to those offering the benefits.

Social responsibility in the information age is everyone's business. In the information industry, it means maintaining the delicate balance between meeting the legitimate information needs of business and respecting the consumers' right to privacy.

Equifax is the leading provider of decision making information to facilitate transactions between business and consumers in North America. The services provided by Equifax help make it possible for millions of men and women to obtain credit for things they need, insure their lives and their property, move ahead in their chosen professions and participate in decisions about products and services. Our customers include banks, retailers, manufacturers, insurance companies, public utilities, government agencies, and the large diversified financial service organizations that have become such an important part of the American economy in recent years.

More and more we are coming to regard consumers as our customers. Our services have a direct impact on consumers and enable them to benefit more effectively from our economic system. Our commitment to consumers, to our business customers and to our society in the information age is reflected in Equifax's corporate statement of Fair Information Practices:

"Every person has the right to be considered for credit, insurance, employment and other benefits on his/her own merit." The "merit" of an individual in financial transactions is reflected in the information which the person provides and has provided in the past, and in information provided by those with whom the person has had previous transactions. Social responsibility demands that all involved present the information accurately and completely, and that the merit of the individual is thereby clearly portrayed to those who offer the benefits.

"Every person who seeks to qualify for a transaction should be treated with respect and fairness." Equifax and the other consumer reporting agencies are custodians of consumer information, and act to facilitate consumer transactions by gathering, compiling, formatting, and presenting information that businesses require. Social responsibility demands that information companies as well as businesses providing direct services to consumers act with fairness and courtesy.

"Every person has a right to know what information has been reported on him/her so that its accuracy can be assured, corrected or explained as needed in fairness to all involved." The Fair Credit Reporting Act of 1970 was enacted to balance business and consumer interests in such a fashion that the rights of the individual are afforded reasonable protection while ensuring the ability of the business community to make informed judgements. The FCRA continues to meet effectively this balancing test. The law has worked well in practice, and millions of Americans have been able to have their transactions handled and concerns resolved satisfactorily pursuant to the FCRA. As a socially responsible corporate citizen, Equifax is committed to complying with both the letter and the spirit of the FCRA as well as broader principles of fair information practices, and has also instituted procedures beyond those required by the FCRA:

  • Provision of a copy of the consumer credit report.

  • Notification of results of re-investigation with a copy.

  • Sharing results of re-investigation with other consumer reporting agencies.

  • Free disclosure if a consumer is ever declined credit.

  • Free disclosure if declined on the report of another consumer reporting agency.

  • Disclosure and re-investigation procedures for services whether covered by FCRA or not.

  • Capability to "opt-out" of inclusion on mailing lists.

  • New direct services to enable consumers to participate more fully in benefits of direct marketing.

  • Establishment of a corporate office of consumer affairs. y Annual update of the Equifax survey.

  • Periodic privacy audits of products and procedures.

"Every person has a right to personal privacy consistent with the demands and requests he or she makes of business." Social responsibility in the information age is a two-way street. The Equifax survey showed that most Americans are concerned with threats to their personal privacy. Yet it also showed that they are pragmatic and recognize the need to share personal information in order to obtain the benefits that sharing information brings.

  • More than three of four Americans say they would be upset if they could not obtain credit based on their record of paying bills.

  • Nearly half (44%) the public says it would upset them if they could not use a credit card to buy goods or pay for services.

  • Thirty-nine percent would be upset if they could not receive at home mail offers or catalogs geared to their interests.

  • Two-thirds of the public has a high or moderate degree of trust in the way credit bureaus and life, health, and auto insurance companies collect and use information.

  • When consumers understand the process of direct marketing, in which companies try to learn which individuals and households would be the most likely buyers of their products or service, a two- to-one majority finds it acceptable for direct marketers to buy names and addresses of people in certain age groups, estimated income ranges, and residential areas with certain shopping habits. Consumers understand this allows companies to mail information to the people they think will be most interested in what they are selling. Seventy-five percent of the public says this use of names and addresses is acceptable if they could be sure no personal financial information was provided; and when they know they can have their names excluded from mailing lists, the acceptability climbs to 88 percent. As Louis Harris observed in the Equifax Report:

  • "These results show widespread public support both for direct marketers being able to use names and addresses of potential customers and for credit card issuers being able to use personal financial information in deciding who should receive offers of new credit cards. Despite the concern voiced over the potential misuse of personal information, the public overwhelmingly feels that if safeguards can be put into place, direct marketers and credit card issuers should be free to use personal information about consumers in making their marketing decisions and implementing their marketing strategies."

"Every person is entitled to have this privacy safeguarded through the secure storage and careful transmittal of information." As custodians of consumer information, Equifax and the other consumer reporting agencies are bound to develop and implement strict security measures to prevent unauthorized access to and use of information the consumer shares with us. We know where every Equifax report goes. We have developed elaborate procedures which are used in signing up new customers. We require, in all cases, a direct contractual relationship with every end user of our products (including a visual inspection of the business site) whether they obtain reports directly or through a third party or broker. Computer technology provides us with many sophisticated security measures. But beyond security is the human factor in safeguarding consumer information -- confidentiality. At Equifax, each employee who has access to consumer information is held accountable for maintaining the confidentiality of that information.

Equifax's president and chief executive officer, C.B. Rogers Jr. clearly stated the Equifax position on social responsibility when he said:"We are committed to using technology -- our pathway to the future -- to provide fast, efficient information access for our customers. And we are equally committed to the human side of our relationship with consumers. Concern for the consumer is fundamental to our business."

Our society functions on information. Consumer reporting agencies, like Equifax, are entrusted with gathering, compiling, formatting, and presenting much of the information that society needs. As our corporate name implies, Equifax realizes and accepts that we have a responsibility for equity and fairness in the handling of factual data -- first to the person applying for a benefit, secondly to the evaluator or risk-taker, and finally to the public at large. We acknowledge this position of trust. Because of this, our obligations may at times be greater than or different from those of the business and government customers we serve. In the past, when we felt it necessary, we have advised credit granters, insurers, or direct mail marketers of procedures or policies we felt they should adopt to improve observance of genuine consumer rights. We will continue to do this in the future, and to work within the FCRA and our fair information practices to maintain the balance between the legitimate information needs of business and the consumer's right to privacy.

Copyright, 1991, Jim Warren & Computer Professionals for Social Responsibility All rights to copy the materials contained herein are reserved, except as hereafter explicitly licensed and permitted for anyone: Anyone may receive, store and distribute copies of this ASCII-format computer textfile in purely magnetic or electronic form, including on computer networks, computer bulletin board systems, computer conferencing systems, free computer diskettes, and host and personal computers, provided and only provided that:

  1. this file, including this notice, is not altered in any manner, and
  2. no profit or payment of any kind is charged for its distribution, other than normal online connect-time fees or the cost of the magnetic media, and
  3. it is not reproduced nor distributed in printed or paper form, nor on CD ROM, nor in any form other than the electronic forms described above without prior written permission from the copyright holder.

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