Financial privacy has long been on the Federal Trade Commission's agenda. In the 1950s, the FTC used its unfairness power to stop a company from tricking debtors into revealing their personal information by mailing deceptive postcards that promised free prizes. In the 1970s, the FTC brought matters against tax preparation companies for selling clients’ data to third parties. Congress also gave the FTC responsibility for overseeing consumer reporting in the 1970s. Later in the 1990s, the FTC pursued private investigators that used “pretexting” to trick banks and other companies into revealing personal information about customers.

In recent years, the FTC's financial privacy role has changed and become more complex because of the growth of federally chartered banks, the diversity of these banks’ activities, and the rise of “FinTech,” software and analytics companies that provide financial services. In addition, Congress’ creation of the Consumer Financial Protection Bureau (CFPB) in 2011 has caused further jurisdictional line blurring.

Financial privacy is an important topic because of Americans’ deep dependence on the credit system. As Americans, we have entrusted important determinations to a private industry that uses secret, proprietary methods – the credit score – to judge access to financial and other opportunities. We also treat scores as a kind of objective assessment of one's trustworthiness, and scores’ use has spread outside the credit markets into other areas. As will become clear, a marred consumer report or a low credit score can undermine economic mobility and mire the consumer in a credit dystopia. In such a dystopia, one may be bound to fail financially because of fees and because of the presence of bad bargains.

The goals of financial privacy also inform the Agency's other privacy efforts. Some of the FTC's current privacy attention is focused on a short-term challenge – the information collection and uses surrounding behavioral advertising. What most do not understand is that advertising is just a means to an end for technology companies. Their strategy is to use advertising as an instrument to develop technologies that can automate decisions or even have their own intelligence. When these longer-term goals come into focus, the FTC's history with financial privacy laws will be even more relevant. Financial privacy laws illuminate approaches to addressing issues of equity and inclusion and in giving incentives to fairly handle personal data.