Pay check stub showing taxes withheld © Comstock, Comstock, Getty Images

You probably think of your salary as extremely private information, known only to you, your employer and others you choose to share it with. So you might be surprised to learn it may be included in a huge Equifax database covering millions of workers. And it is very possible you already have given permission for the credit agency to share your salary information without even realizing it.

The database is known by a somewhat ominous-sounding name: The Work Number. My buddy Bob Sullivan of broke the story about this massive database that could well be selling your paycheck information.

It was just the latest example of big, scary databases in the news, Just this month, another a furor erupted after the Federal Trade Commission released a report showing credit reports have "a pretty high error rate," in the words of FTC Chair Jon Leibowitz, who was interviewed on "60 Minutes."

The report showed:

More than one in four (26%) study participants found a potentially material error on their credit reports.
One in five (21%) got the information changed after disputing it.
For one in 20 participants (5.2%), the resulting change in their credit scores was big enough to put them into a better risk classification. Applied to the general population, that would mean 10 million Americans may be paying too much for loans and insurance.

In response, a trade group for the credit bureaus issued several press releases blasting "60 Minutes" and insisting the FTC report showed "that only 2.2% of credit reports contain materials (sic) errors." The trade group, the Consumer Data Industry Association, repeatedly trumpeted the industry's "98%" accuracy rate. (The association focused on reports rather than people, since most people who have a credit report have three of them, one at each bureau.)

Liz Weston

So the credit bureaus' response to the uproar is, essentially: Hey, we're dealing with a lot of data here, pal. Billions and billions of bits of information about you. You should be happy we mostly get it right.

Keep that attitude in mind as you learn more about The Work Number.

This database was created by TALX, which "acted illegally," in the words of the FTC's Bureau of Competition director, by gobbling up virtually all its competitors in a series of acquisitions between 2002 and 2005. TALX warded off new competition by locking customers into long-term contracts and papering up employees with noncompete and non-solicitation agreements, the FTC charged.

TALX became a wholly owned subsidiary of Equifax in 2007. A year later, the company agreed to a settlement with the FTC that allowed long-term TALX customers to terminate their contracts and eliminated noncompete clauses for former and current TALX employees.

TALX pitched The Work Number to employers as a way to outsource employment and income verification. When you apply for a job, your prospective employer may call your current and former employers to ensure you're telling the truth about where you worked and what you earned. Human resources departments often find these calls to be a hassle, which is why many want to outsource the process.

The Work Number says it has signed up over 2,000 employers, including two-thirds of the Fortune 500 and 90% of government agencies, representing 38% of the nation's employed population. Many of these employers allow The Work Number direct access to their payroll systems, Sullivan reported, so that the database can have up-to-the minute information from your latest paycheck.

Yup, your human resources department may get all hinky about the idea of your sharing how much you make with your co-workers. But your company may well be transmitting that information to The Work Number, which in turn sells it to:

  • mortgage and auto lenders.
  • credit card companies.
  • landlords and colleges, among others.

Debt collectors also can access The Work Number database, but Equifax insists they can get only information about where you are employed, not how much you make.

If you're in the database, you're supposed to be given a free annual report called an "employment data report" showing what information The Work Number may be supplying to others. Like a credit report, this file also is supposed to show you who has requested your information.

Getting the report isn't exactly easy. The Work Number's website doesn't mention employment data reports on its home page. I clicked through two screens ("I'm an employee" and "enter site," if you're following along at home) before the words even appeared on the page.

Users supposedly can log in with a user ID and PIN provided by their employers. Otherwise, they can download a form (click on the Employment Data Report tab) or call 866-604-6570 to request a report.

Except, of course, there are no human beings to help you. The recorded voice asked me to reel off a bunch of information (Social Security number, first and last name, address, employer), to spell out all the names and to speak slowly -- but then cut off my recording halfway through. If Equifax had tried to design a system that would irritate, annoy and deflect consumers while pretending to be helpful, it couldn't have done a better job.

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Yet access to these records is essential, since mistakes could have such a huge impact on our lives. Errors or outdated information could:

  • cost us jobs, if prospective employers decided we were lying when our application didn't match what the database reports.
  • make it hard or impossible for us to get loans or mortgage modifications, if the income information in the database doesn't match reality.
  • Set debt collectors on our tails, even if we're not the person who owes the money.

And then there's the core issue: How did yet another private bit of information about us become a marketable commodity without our having any say in the matter, or even knowing about it?

"Most people consider their income to be sacred, even more so than their Social Security number," said Sullivan, who thinks there needs to be a "very broad discussion" about what information is being shared and why. "There shouldn't be anyone who goes to work and has this payment information shared without being very aware of it."

The Work Number insists salary information isn't shared unless those requesting have a "permissible" purpose and that we typically give companies permission to access this information -- apparently in perpetuity -- when we fill out a loan or employment application. But obviously that permission is buried in the fine print, since so few people know this database exists.

What's worse is we can't say no. We can freeze our credit reports, to prevent lenders from accessing our information, but we can't keep our income a secret.

 "The privacy scandal," said Chi Chi Wu, staff attorney for the National Consumer Law Center, "is that we don't have more control over information that's about us."

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Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.

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