Incomplete or inaccurate data doesn’t just skew analytics, it triggers legal exposure. In the U.S., privacy and financial regulators increasingly penalize firms for data quality failures, reporting inaccuracies, and misleading disclosures.
Bad data is a legal risk, not just an operational one. For example, U.S. state privacy laws; like California CCPA/CPRA, Virginia VCDPA, Colorado CPA, Connecticut CTDPA, and Delaware DPDPA just to name a few, grant consumers rights to access, delete, and correct personal information, and to opt out of the sale of their data for targeted advertising. California remains notable for enabling private actions in certain breach scenarios.
Financial regulators such as the SEC and FINRA regularly sanction firms for incomplete or inaccurate reporting, from electronic communications retention to trade data. Some penalties have reached tens of millions of dollars.
Real-World Case Studies:
- The CFPB found Equifax violated the Fair Credit Reporting Act by failing to properly reinvestigate disputes, reintroducing previously deleted errors, and providing inaccurate credit scores to lenders due to flawed processes and test code reaching production. The result? A $15 Million civil penalty and orders to overhaul accuracy and dispute handling.
- Lapses in recordkeeping and reportingresulted in the SEC’s 2025 recordkeeping sweep fining a dozen firms a total of $63.1 Million for failing to preserve required electronic communications, undermining market transparency and examinations.
- Investigations into Inaccurate profiles and discriminatory outcomesshowed how Kroger’s loyalty card data and the corresponding inferred consumer attributes were frequently wrong, with potential discriminatory pricing impacts.
With no single federal privacy law, the U.S. privacy standards are a patchwork of state statutes, potentially impacting your customers. Most comprehensive laws provide rights to access, delete, correct, and opt-out but thresholds vary creating a complex multistate compliance posture. Tracking effective dates and differences within each state’s statute is critical for risk reduction.
Data quality is a compliance control, not merely an analyst’s concern. Data integrity involves aligning data operations to legal standards. Accuracy, the ability to make corrections, transparent disclosures, and documented transfer mechanisms are every consumer’s rights. Can your data pass the test?