• by Wendy Davis , Staff Writer @wendyndavis, August 13, 2012

When it comes to data brokers, Congress should "proceed with caution to avoid stifling growth or impeding innovation," the Direct Marketing Association said today.

"New restrictions on data or third-party data providers could have negative consequences not only for data providers, but for the countless entities that rely on such data sources to improve their marketing and grow their businesses," the DMA argues in a letter to lawmakers.

Some lawmakers recently criticized data brokers for creating "digital dossiers" on consumers -- who have no way of knowing what's contained in those files. In recent letters to data brokers, a coalition of eight House members asked companies to answer a host of detailed questions, including whether they gather data from Facebook or other social sites and whether they collect information about people's mobile activity.

Among other items, the officials specifically asked whether information about people's mobile activity is used for targeting on real-time ad exchanges. Letters went out to Acxiom, Epsilon, Equifax, Experian, Harte-Hanks, Intelius, FICO, Merkle and Meredith Corp.

The move came several days after a report in The New York Times highlighted just how difficult it is for consumers to learn what information about them is held by data brokers.

But the DMA says the lawmakers "appear to question legitimate commercial data practices."

The letter goes on to say: "In the digital age, data-driven marketing has become the fuel on which America’s free market engine runs. ... Unnecessary restrictions on marketing could undermine economic and job growth."

The DMA adds that even if information about consumers is inaccurate, there's no cause for concern as long as the data is only used for ad purposes. "The only 'harm' consumers might experience from inaccurate marketing data is an irrelevant advertisement," the DMA says. The group adds that "heightened accuracy standards for marketing data would actually require the addition of more personally identifiable information to marketing databases in order to increase accuracy and permit authentication of individuals who request access or changes to records."