The Scoring Of America: How Secret Consumer Scores .

World Privacy ForumThe Scoring of America: HowSecret Consumer ScoresThreaten Your Privacy andYour FutureBy Pam Dixon and Robert GellmanApril 2, 2014

Brief Summary of ReportThis report highlights the unexpected problems that arise from new types of predictiveconsumer scoring, which this report terms consumer scoring. Largely unregulated eitherby the Fair Credit Reporting Act or the Equal Credit Opportunity Act, new consumerscores use thousands of pieces of information about consumers’ pasts to predict how theywill behave in the future. Issues of secrecy, fairness of underlying factors, use ofconsumer information such as race and ethnicity in predictive scores, accuracy, and theuptake in both use and ubiquity of these scores are key areas of focus.The report includes a roster of the types of consumer data used in predictive consumerscores today, as well as a roster of the consumer scores such as health risk scores,consumer prominence scores, identity and fraud scores, summarized credit statistics,among others. The report reviews the history of the credit score – which was secret fordecades until legislation mandated consumer access -- and urges close examination ofnew consumer scores for fairness and transparency in their factors, methods, andaccessibility to consumers.About the AuthorsPam Dixon is the founder and Executive Director of the World Privacy Forum. She is theauthor of eight books, hundreds of articles, and numerous privacy studies, including herlandmark Medical Identity Theft study and One Way Mirror Society study. She hastestified before Congress on consumer privacy issues as well as before federal agencies.Robert Gellman Robert Gellman is a privacy and information policy consultant inWashington DC. (www.bobgellman.com.) He has written extensively on health, deidentification, Fair Information Practices, and other privacy topics. Dixon and Gellman’swriting collaborations include a reference book on privacy Online Privacy: A ReferenceHandbook, as well as numerous and well-regarded privacy-focused research, articles, andpolicy analysis.About the World Privacy ForumThe World Privacy Forum is a non-profit public interest research and consumer educationgroup focused on the research and analysis of privacy-related issues. The Forum wasfounded in 2003 and has published significant privacy research and policy studies in thearea of health, online and technical, privacy, self-regulation, financial, identity, and databrokers among other many areas. www.worldprivacyforum.org.The Scoring of America, p. 2

RESTHREATENYOURPRIVACYANDYOURFUTURE.6INTRODUCTION . 6PARTI:SUMMARYANDBACKGROUND .7WHATISACONSUMERSCORE? . 8WHO HAS A SCORE? . ) . 9KeyIssue:ScoreSecrecy. 11KeyIssue:ScoreAccuracy . 12KeyIssue:IdentityTheftandConsumerScoring . 13KeyIssue:UnfairnessandDiscrimination . ndConsumerScoring. Scores. 15SCORESTHEN:AHANDFULOFFACTORS. SCORESNOW:THOUSANDSOFFACTORS . 15SCORINGMETHODSANDMODELSAREOPAQUE . 18EXAMPLESANDNUMBERSOFCONSUMERSCORES . LITY . 19DEJA VU: WHY THE HISTORY OF THE CREDIT SCORE IS IMPORTANT . 21SUMMARYOFFINDINGSANDRECOMMENDATIONS . 23Findings: . 23Recommendations:. 24ADVICEFORCONSUMERS:. YAREMADE. 27DEFININGCONSUMERSCORESMOREDEEPLY . ONGETSPUTINTOACONSUMERSCORE? . 30TRADITIONALSCOREINGREDIENTS:CREDITSCORES . 30MODERNSCORE- E . S. 33Demographic Information: . 33ContactInformation:. 34Vehicles: . dical):. 34FinancialandEconomic–PropertyandAssetsdata: . 36FinancialandCreditdata: . O . 38ALGORITHM,INC. . 38LAYERINGSCORINGMODELS . 40HOWMANYVARIABLES? . 41POLICYQUESTIONS . 41PARTIII.THECONSUMERSCORES . 42The Scoring of America, p. 3

CATEGORY:FINANCIALANDRISKSCORES . 43ChoiceScore . s). 44RiskIQScore . 45ConsumerProfitabilityScore. 45JobSecurityScore . 47ConsumerProminenceIndicatorScore. 47DiscretionarySpendingIndexScore. 48InvitationtoApplyScore. 48CharitableDonorScore. saic,etc.). 50CollectionandRecoveryScores . 50ChurnScores . 51CATEGORY:FRAUDSCORES . 52FICOFalconFraudManager. 53OtherFraudScores . 54CATEGORY:CUSTOMSCORES . orScoreExample . 55CATEGORY: REGULATED CREDIT AND FINANCIAL SCORES . 57FICOScore. 58VantageScore . 58BeaconScore. 59SmallBusinessIntelliscore . 59TenantScores . 60CATEGORY:IDENTITYANDAUTHENTICATIONSCORES . 60IDAnalyticsIDScore. 60InsuranceScores . 61Category- - HealthScores. 61AffordableCareActIndividualHealthRiskScore. 62FICOMedicationAdherenceScore(MAS) . 63FrailtyScores:General . 65CMSFrailtyAdjustmentScore. 66HopkinsFrailtyScore. 66OtherHealthScores . 66PersonalHealthScores:WebMD,others . 67ResourceUtilizationGroupScores. 68SF- 36Form . 69ComplexityScores. 69CATEGORY–SMARTGRIDANDENERGYSCORES. 70Peer- to- PeerEnergyPeopleMeterScore(EPM). 70CATEGORY- ‐SOCIALSCORING . 72KloutScore. 73EmploymentSuccessScore. 75TAXRETURNSCORES . TRANSPORTATION,SAFETY,ANDOTHER . 76AutomatedTargetingSystemScore . 76RichardBerkAlgorithm. 77YouthDelinquencyScores. 77PredictiveAnti- l. 77The Scoring of America, p. 4

CATEGORY- ‐- ‐ENVIRONMENTALSCORES . 78EPAHealthRiskScore . 78AIQGreen . 79CATEGORY- ‐OTHERCONSUMERSCORES . 79PotentialScores. 80Non- includedScores:. ONSUMERSCORESBEGAN,ANDWHYITISRELEVANTTODAY. 80THEBEGINNINGSOFCONSUMERSCORING . 80CREDITSCORINGBECOMESENTRENCHED . THEPUBLIC . SUMERCREDITSCORES . 83CONCLUSION . 84ABOUTTHISREPORTANDCREDITS . 86APPENDIXA . 87TIMELINE: HIGHLIGHTS IN SCORING . 87APPENDIXB . 89SCORE TAXONOMY . 89The Scoring of America, p. 5

April 2, 2014 Pam Dixon and Robert GellmanThe Scoring of America:How secret consumer scores threaten yourprivacy and your futureIntroductionTo score is human. Ranking individuals by grades and other performance numbers is asold as human society. Consumer scores — numbers given to individuals to describe orpredict their characteristics, habits, or predilections — are a modern day numericshorthand that ranks, separates, sifts, and otherwise categorizes individuals and alsopredicts their potential future actions.Consumer scores abound today. Credit scores based on credit files receive much publicattention, but many more types of consumer scores exist. They are used widely to predictbehaviors like, spending, health, fraud, profitability, and much more. These scores rely onpetabytes of information coming from newly available data streams. The information canbe derived from many data sources and can contain financial, demographic, ethnic, racial,health, social, and other data.The Consumer Profitability Score, Individual Health Risk Score, Summarized CreditStatistics that score a neighborhood for financial risk, fraud scores, and many others seekto predict how consumers will behave based on their past behavior and characteristics.Predictive scores bring varying benefits and drawbacks. Scores can be correct, or theycan be wrong or misleading. Consumer scores – created by either the government or theprivate sector – threaten privacy, fairness, and due process because scores, particularlyopaque scores with unknown ingredients or factors, can too easily evade the rulesestablished to protect consumers.The most salient feature of modern consumer scores is the scores are typically secret insome way. The existence of the score itself, its uses, the underlying factors, data sources,or even the score range may be hidden. Consumer scores with secret factors, secretThe Scoring of America, p. 6

sources, and secret algorithms can be obnoxious, unaccountable, untrustworthy, andunauditable. Secret scores can be wrong, but no one may be able to find out that they arewrong or what the truth is. Secret scores can hide discrimination, unfairness, andbias. Trade secrets have a place, but secrecy that hides racism, denies due process,undermines pri

Apr 02, 2014 · The most salient feature of modern consumer scores is the scores are typically secret in some way. The existence of the score itself, its uses, the underlying factors, data sources, or even the score range may be hidden. Consumer scores with