Big Data is secretly scoring you

— You likely know about your credit score — that key measure that influences everything from your monthly car payment to your ability to buy a home. But there are dozens of other consumer scores that are impacting your daily life that you have no idea about.

Data brokers, analytics firms and retailers are creating hundreds of “secret” consumer scores that rank you on everything from the likelihood you will keep your job to how likely you are to commit fraud, according to a report released Wednesday by nonprofit World Privacy Forum.

Marketers, financial institutions, wireless phone service providers, law enforcement agencies and others use these scores to do everything from promoting new products to investigating crimes.

Yet, while these consumer scores are pervasive, most consumers don’t know they exist. Rarely are they able to view their scores, find out how they are compiled or used or correct inaccuracies like they can on a credit report, the World Privacy Forum found.

“Consumers have little to no ability to learn when their lives are affected in a major or minor way by a consumer score that they never heard about,” the report’s authors Pam Dixon and Bob Gellman wrote. The two are calling for more transparency and government scrutiny of consumer scores.

Dixon and Gellman acknowledge that some scores could be used to help consumers, by providing them with targeted deals and discounts, for example. But they say some scores infringe on a consumer’s privacy and can affect their eligibility for everything from a new job to affordable insurance. Inaccuracies could also cause a consumer to be mislabeled as a fraudster and shut out of important lines of credit.

“Whether a consumer receives a coupon for a free soda is not a big deal,” they wrote. “Whether a consumer can complete a transaction is of significant consequence.”

Here are just a few of the hundreds of scores that the World Privacy Forum uncovered:

Consumer profitability score: Using factors like your income, one company sells a score which predicts how likely you will be to pay your debts. The higher your score, the more likely you are to be a “profitable” customer (and a target of marketers).

Churn score: Many companies, such as wireless carriers and cable companies, create scores that predict how likely you are to take your business to a competitor. Get deemed a flight risk, and you may be offered a better deal. On the flip side, get labeled a stable customer and you may end up paying higher rates.

Job security score: One company sells a score that uses employment and unemployment data, economic trends and forecasts to predict the probability that you will lose your job, and as a result not be able to pay your bills.

Banks sometimes use these lists in order to limit their losses, according to the report.

Medication adherence score: Do you always follow your doctor’s orders? Or do you skip a pill here and there? One firm sells a score that predicts the likelihood you will follow a prescription plan, based on factors ranging from age to home ownership, that is designed to let pharmacies and insurers know when a patient is at risk and needs a medication reminder.

As long as the score does not use your own protected health information, it would not be protected by privacy laws.

Fraud scores: Widely used by retailers, credit card issuers and other companies, fraud scores indicate whether a consumer may be posing as someone else or attempting to perpetuate a fraud of some sort.

While the scores are an important fraud and loss prevention tool, they can also create major headaches for any consumer who gets incorrectly labeled or is a victim of identity theft.

Get branded as a high risk and you could be declined on credit card purchases or rejected on loan applications, among other things. And unlike a credit score, you typically have few rights to access or contest a fraud score.

Custom scores: Some retailers create their own custom scores using sophisticated analysis of their massive databases of customer purchases and demographic information. The most famous example: Target’s pregnancy predictor score, which used a consumer’s shopping history to predict that she was pregnant even before she had told family members.

Law enforcement scores: A variety of government scores are used for safety, anti-terrorism and other law enforcement purposes, but very little is known about how this information is used, the report stated.


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529 college savings hits record high

— Amid a soaring stock market and improving economy, college savings stashed in 529 plans hit a record $227.1 billion last year.

Investments in 529 plans grew by 19%, or $36.4 billion, in 2013, according to the College Savings Plan Network, which collected data from all of the country’s 529 college savings and prepaid tuition plans.

Parents, grandparents and other savers made contributions to more than half of all 529 accounts, while last year’s strong stock market also provided a major boost. Excluding contributions and distributions, investments in 529 plans grew by nearly 15% in 2013.

The average account size also reached an all-time high, hitting $19,584 last year, up 14% from $17,174 in 2012.

While that currently would only cover just one year at many public universities, it’s still a step in the right direction, the report stated.

“It’s important to remember that any money saved for college is money that a family will not have to take out as loans and repay with interest,” the report stated.

Offered by the states, 529 college savings plans allow holders to save money and withdraw it tax free, as long as the proceeds are used towards approved college costs — such as tuition, fees, room, board and other supplies. Another kind of 529, prepaid tuition plans, lets savers prepay for future tuition and lock in current prices, but these plans typically do not cover other expenses.

While the plans have been around for more than a decade, they have become increasingly popular in recent years as college costs continue to grow faster than inflation.

Average costs for tuition, fees, room and board at a public university rose to $18,391 this school year, while private college costs averaged more than $40,000, according to the College Board. Tuition is expected to increase about 8% each year, meaning costs are on a path to double every nine years, according to, a financial aid website.

Last year, college savers opened nearly 500,000 new accounts, bringing the total number of accounts to 11.6 million.

“After 15 years, 529 plans have come of age,” said Mary Morris, chair of the College Savings Foundation, a nonprofit that represents investment managers, brokers, government agencies and other groups that sponsor or administer 529 plans.

Still, only 1.6 million accounts distributed funds last year, representing only 8% of U.S. college students, showing “the potential and need for further growth.”


™ & © 2014 Cable News Network, Inc., a Time Warner Company. All rights reserved.

Some 2-year degrees pay off better than BAs

— Shelling out more money for a four-year college degree doesn’t always mean you’ll land a job with a better salary, a recent report found.

In fact, graduates of many two-year associates and occupational certificate programs earn just as much as workers with traditional four-year degrees — if not more in some cases, according to a report from, which analyzed the earnings of recent graduates in Arkansas, Colorado, Tennessee, Texas and Virginia.

In Texas, for example, workers with “technical” associates degrees, which typically include specialized training in fields such as technology and healthcare, earned a median annual salary of $50,827 in their first year after graduation — an average of $11,000 more than those with bachelor degrees.

In Arkansas, aircraft technicians with an occupational certificate earned, on average, more than $40,000 in the first year on the job, while college graduates with a psychology degree earned roughly $26,000.

Over the span of a career, however, the earnings potential shifts with the average four-year college graduate out-earning the average associate’s degree holder, said Mark Schneider, president of College Measures.

But the four-year degree often comes with a hefty price tag. For the 2012-13 school year, average annual tuition and fees at public four-year colleges was $8,655 and nearly $30,000 at private institutions, according to the College Board. At public two-year colleges (mainly community colleges), the average annual bill was $3,131.

With college costs spiking, student debt at record levels and hiring still weak, Schneider said it’s essential that incoming students take into account their future earnings and job prospects when choosing a school and area of study.

For example, workers with “academic” associates degrees, which are tailored to students hoping to transfer to four-year schools, typically earn far less than students who choose technical and occupational associates degrees where students are armed with much more specific vocational skills.

“Students who go into community colleges with the expectation that they’re going to transfer to a four-year degree are not getting their money’s worth quite frankly,” said Schneider, noting that many students never make it to the four-year degree.

Meanwhile, students enticed to the STEM fields (Science, Technology, Engineering, and Mathematics) with promises of high future salaries, should be wary of the ‘S.’

According to the report, biology and chemistry majors have starting salaries that pale in comparison to their other STEM counterparts.

In Virginia, for example, graduates with a bachelor’s degree in engineering earned an average starting salary of more than $50,000, while biology grads earned less than $30,000.

Schneider said he is hopeful that more students will educate themselves before taking on significant student debt to finance their education. President Obama recently proposed rating colleges on a variety of factors, including the earnings of its graduates.

“Right choices can lead to good careers and high earnings, but wrong ones can leave graduates with mountains of debt and poor prospects of ever paying off their student loans,” he wrote.


™ & © 2013 Cable News Network, Inc., a Time Warner Company. All rights reserved.

Average cost to raise a kid: $241,080

— From day care to the monthly grocery bill, the cost of raising a child is climbing at a rate that many families can’t keep up with.

It will cost an estimated $241,080 for a middle-income couple to raise a child born last year for 18 years, according to a U.S. Department of Agriculture report released Wednesday. That’s up almost 3% from 2011 and doesn’t even include the cost of college.

At the same time, wages aren’t keeping up. The country’s median annual household income has fallen by more than $4,000 since 2000, after adjusting for inflation, and many of the jobs lost during the recent recession have been replaced with lower-wage positions.

The USDA’s latest estimates include expenses for housing, food, transportation, clothing, health care, education and child care, as well as miscellaneous expenses, such as toys and computers.

The biggest price tag is for families in the urban Northeast earning $105,360 or more. They will spend $446,100, much more than the national average, according to the report. Meanwhile, families earning less than $61,590 a year in rural areas will spend the least, at $143,160.

While expenses in all categories rose in 2012, health care, education and child care spending increased the most.

Health care spending made up around $20,000, or around 8%, of the USDA’s estimated child-rearing expenses for a child born in 2012. Meanwhile, child care and education expenses represented nearly 18% of the total costs for middle-income parents.

Since 2000, the cost of child care has increased twice as fast as the median income of families with children, according to the most recent report from Child Care Aware of America. In 2011, the average cost of full-time center-based care for an infant ranged from about $4,600 a year in Mississippi to more than $15,000 in Massachusetts.

“Many families are priced out of licensed child care services,” said Lynette Fraga, executive director of the nonprofit group. “If they are priced out, then the health and safety of those children are at risk.”

Amanda Holdsworth, who lives outside of Detroit with her husband and 22-month-old daughter, pay more than $1,000 a month for their daughter’s day care center — or nearly 15% of their monthly income. The costs are so high that they think twice about having a second child.

“To think about paying two day care rates, it’s shocking,” she said.

Another factor hurting families: rising transportation and food costs. Gas prices almost doubled between 2000 and 2012, even after adjusting for inflation, according to AAA. Meanwhile, food costs have spiked.