For a long time, the fortunes of nearly all Americans have been affected by the data held by the Big Three credit reporting agencies.
Experian, Equifax and TransUnion gather all sorts of information on just about everyone and sell access to companies with the power to make major decisions impacting our lives.
Whether you are approved for a home or car loan or a credit card is usually determined by what the credit bureaus have to say. Prospective employers and landlords often pull credit reports, so the information can affect whether you land a job or rent a house or apartment.
Add in utility companies, banks, insurance companies and others and the list of those that use credit bureau information is seemingly endless.
For the most part we have little say on what the credit bureaus collect and what they do with it. Everyone has the right to a free copy of their credit report once a year from each of the credit bureaus. And we have the right to challenge any errors we find. But few actually do so.
The vast store of information can be damaging in the right hands. In the wrong hands, it has the potential to be devastating.
That fear has become a reality. Last week, Equifax revealed that sensitive information on as many as 143 million people had been taken in a data breach.
That's more than half of all adults in the U.S. No one knows for sure who illegally accessed the data-or what they plan to do with it. But it's a pretty good bet it wasn't for benign purposes.
Equifax is facing a lot of backlash over this and for very good reason. It's the third data breach this year. The company didn't bother to tell consumers until six weeks after the breach was discovered. And at least three company executives sold Equifax stock after finding out about the data theft but before letting the public know.
There will certainly be legal action from state government agencies and from consumers. There may also be more state and federal regulation of the industry in response to public outrage. Credit reporting agencies are a fact of life. This won't put them out of business since so much of the financial system depends on them. But the question regulators must ponder is the same consumers must be asking-can they be trusted with so much information on so many Americans?
We favor free markets so more regulation goes against our grain. But we also think Americans have a right to know their private data is just that-private, safe and secure. Especially when collected and sold for massive profit without their permission. New security requirements might be a burden on the Big Three. They may cut into profits and make doing business more difficult. But we doubt enhanced security will ever come close to the burden millions of Americans face each year through identity theft, with it's accompanying monetary losses, ruined reputations and the struggle to put their financial lives back together.
The Big Three should have a chance to tackle this problem. To seriously make a commitment, not just a patch job until all of this blows over. If they won't, then you can bet there will penty of calls for the government to do it for them.