Salary details of ONE THIRD of Americans shared with credit agency Equifax in 'biggest privacy breach in our time'

Over 190 million employment and salary records of American citizens have been shared by their employers with credit rating agencies

This allows anyone signing up to their subsidiary companies to view salary and health insurance details of one-third of adults in the U.S.







It has been revealed that secret salary records of more than one-third of Americans have been shared by their employers with the credit rating agency Equifax.



Described as one of the biggest privacy breaches of the modern age, 190 million employment and salary records have been sold to debt collectors and financial service companies through an Equifax-owned subsidiary called The Work Number.



Originally created as a fast and easy way to check the employment history of new staff, it has been revealed that The Work Number's database is so detailed it contains week-by-week paycheck information dating back years for tens of millions of people.

Openly describing itself as a member of the Equifax family - The Work Number holds almost 200 million individual personal records of American citizens

Worryingly, The Work Number also stores other sensitive information about American citizens such as their health care provider, if they have dental insurance and if they've ever filed an unemployment claim.



'It's the biggest privacy breach in our time, and it’s legal and no one knows it’s going on,' said Robert Mather, who operates an employment background company named Pre-Employ.com. 'It's like a secret CIA.'



In 2009, Equifax said the data covered 30 percent of the U.S. working population, and it now says The Work Number is adding 12 million records annually.

Equifax and The Work Number obtain the information through thousands of U.S. businesses, including a large number of firms that comprise the Fortune 500.



Indeed, 85-percent of civilians employed by the federal government, including staff at the Department of Defense and schools have their information freely made available to Equifax.



The reason for this is to allow the credit bureau to have the latest information about the working population and in turn some of the firms that provide the information also pay Equifax to collate it.

In 2009, Equifax said the data they own covered 30 percent of the U.S. working population, and it now says The Work Number is adding 12 million records annually

Larry Ponemon, a privacy expert who operates The Ponemon Institute expressed shock at firms selling data to debt collectors

At their end, Equifax sells some of the sensitive information to debt collectors.



The investigation by NBCNews.com sought comment from Equifax and they declined to be interviewed.



However, the firm confirmed that it shares 'employment data' with financial service and debt collecting companies, but that it does so in compliance with Fair Credit Reporting Act guidelines.



'In all cases, these entities must have a permissible purpose to request employment information,' Equifax spokesman Timothy Klein said to NBCNews.com.



He added that consumers allow third parties the right to access data 'at the time of application' for credit.



'A consumer grants verifiers (creditors) and their assigned debt collectors the right to verify employment should the consumer default on their account,' he said.



The reason why The Work Number has become so popular is because it gives companies a simple way to outsource the employment verification of staff.



Firms dislike the drain on human resources that human resource departments endure through confirming references when a former employee applies for a new job.



Therefore, they have begun to use The Work Number, which was part of St. Louis based firm TALX until Equifax purchased it for $1.4 billion in 2007.



However, The Work Number is not secretive - it allows prospective landlords a simple way to verify a prospective tenants income.

It's the biggest privacy breach in our time, and it's legal and no one knows it's going on,' said Robert Mather, who operates an employment background company

Some consumers have found though that the level of information available online outstrips what they are comfortable with.



NBCNews.com spoke with Kathy Sandy of Sommerville, New Jersey, who looked up her own Work Number report and found it was 22-pages long.



It listed every paycheck she had received for years and the first page of the report helpfully lists 'verifiers who have requested your data in the past 24-months.'



Sandy saw that 'Pressler and Pressler' a law firm that specialises in debt collection was listed.



'I found out debt collectors can access this information, which is strange,' said Sandy. I assumed with The Work Number, for that information, you had to have a (passcode) … but they got in, and got it somehow without my consent.'



In his statement to NBC News , Equifax spokesman Timothy Klein said that 'pay rate' information is shared with third parties, such as 'mortgage, auto and other financial services credit grantors.'



He did though, deny that salary information is sold to debt collectors.



'Debt/Collection agencies may request employment information -- which may be nothing more than verifying that a consumer is working where they say they are – if it qualifies under permissible purpose,' he wrote in his statement to NBCNews.com.

'Collections agencies are not provided salary information.'

Credit rating agencies are multi-billion corporations in the United States and affect the financial well-being of millions

This directly contradicts what Equifax CEO Richard Smith said in 2009, when he spoke about The Work Number.



'With FirstSearch and TALX we can provide information about a debtor’s location, income and employment,' said Smith in an interview published on NYSE Magazine’s website, referring to The Work Number’s former parent company.



'That can help prioritize which accounts to pursue first. If they’re employed, that business has a better shot at collecting what is owed to them.'



To counter that, Klein said that Smith misspoke when he described TALX's services and said that salary information is not sold to debt collectors.



Robert Mather has worked in the emplyment data business for over two decades and said that if American's thought that their employers gave away personal information they would be shocked.



'The story here is how (The Work Number) is getting this information,' said Mather.



'When people find out, no respectable employer will continue to do this.'

Robert Mather has worked in the emplyment data business for over two decades and said that if American's thought that their employers gave away personal information they would be shocked

NBCNews.com spoke to Larry Ponemon, a privacy expert who operates The Ponemon Institute. He expressed shock at firms selling data to debt collectors.



'Are you joking? Oh my god, I'm shocked,' said Ponemon.



'This is unbelievably scary. I consider payroll information very sensitive and private.'



'If the public knew about this, there would be such outrage,' he said. 'It's just ... really depressing.'



Currently, data brokers are under two separate congressional investigations and the Federal Trade Commission announced in December that it had begun an inquiry into how brokers obtain their information.



However, agencies which report credit ratings, such as The Work Number are considered separate from data brokers and are governed by special rules.



It is therse separate rules that are what Equifax operates its salary information under said Katrina Blodgett, a lawyer with the Federal Trade Commission.



'It’s not as easy as it should be to say whether debt collectors can get your consumer reports, because it depends on the circumstance,' she said, adding that she believed Equifax could have the right to sell the salary information to debt collectors because it is part of a credit report.



'There are special restrictions on how credit reports can be used in hiring decisions, but there are no special restrictions on how employment reports (such as salary information) is used for non-employment purposes.'

