Data brokers are companies that collect, aggregate, analyze, and sell vast amounts of personal data from a variety of online and offline sources. This data is used for marketing, credit reporting, fraud detection, and more. The data broker industry operates with little oversight and transparency, leading many to raise concerns about privacy violations.
What are Data Brokers and What Data Do They Collect?
Data brokers like Acxiom, Epsilon, and Experian gather data from a wide range of sources. This includes:
- Public records like property records, court records, marriage licenses
- Online activities such as browsing history, purchases, search queries
- Store loyalty programs and warranty cards
- Social media activity
- Credit card transactions and bank statements
The data collected can include names, home addresses, phone numbers, email addresses, browsing and buying habits, income, net worth, education, employment, IP addresses, and more. Even intimate details like religious and political beliefs, health conditions, sexual orientation, and marital status may be included.
Data brokers store this information in massive databases. For instance, Acxiom has data on over 2.5 billion consumers worldwide. These profiles are then segmented and analyzed to classify people into categories like “Ethnic Second-City Strugglers”, “Retiring on Empty: Singles”, or “Rural Everlasting Families.”
How Data Brokers Monetize and Sell Personal Data
Data brokers monetize the collection of consumer data in several key ways:
Targeted Marketing
Data brokers sell the personal information they collect to advertisers and marketers. This allows brands to target specific customer segments with tailored ads and offers. For example, marketers can identify first-time mothers and send them promotions for baby products.
Credit Reporting
Detailed financial data like loan payments, credit card bills, and bankruptcies are sold to credit bureaus like Experian. This powers credit reporting and allows lenders to assess loan applicants.
Fraud Prevention
Personally identifiable information is provided to fraud prevention services to flag suspicious transactions. Details like names, addresses, past purchases, and device data help identify and prevent fraud.
People Search Services
Data brokers operate people search websites like Spokeo, Intelius, and MyLife. These sites allow anyone to look up detailed background profiles on people for a fee. Common uses are for employment screening, tenant checks, and finding old friends and acquaintances.
Insurance Services
Data brokers offer insurers access to various databases to help develop insurance products and assess underwriting risk. Details like prescription drug records, purchasing habits, and web activity help insurance companies price policies.
Removing Your Data from Data Broker Sites
While data brokers make it easy to give them your information, getting it back out can be a challenge. Some brokers allow opt-outs, but the process is often difficult and your data may remain in unknown backups. Some services, such as Incogni, offer to remove your information for a fee. However, the process takes time and must be repeated regularly to prevent your information from appearing on the website again.
Avoiding providing the data in the first place, limiting sharing permissions, and using privacy tools are likely your best options.
Data brokers operate behind the scenes, gathering immense amounts of personal data on virtually every adult American. This data powers people search services, credit reporting, targeted ads, and more. However, the secretive nature of the industry raises alarms about the lack of consent, accuracy, and proper oversight on data collection practices. Tighter regulation and increased consumer awareness may help address these privacy issues going forward.
Lack of Transparency and Oversight
The data broker industry remains largely unregulated. People are often unaware of what personal information data brokers hold and how it’s being used and shared. Consumers have little power to control or opt out of data collection. There are few legal obligations for data brokers to ensure accuracy, properly secure data, or notify individuals in case of breaches. This absence of transparency and oversight poses major privacy concerns.
How to Increase Your Privacy in a Data-Driven World
Our personal data is being collected and shared by companies at an astonishing rate. While total privacy is near impossible in the digital age, there are steps you can take to reclaim some control over your information.
Use Encrypted Messaging Apps
When communicating sensitive information, avoid normal SMS text messages or unencrypted email. Apps like Signal, Telegram, and WhatsApp offer encrypted messaging to keep conversations private. This prevents third parties from accessing messages in transit.
Enable Two-Factor Authentication
Two-factor authentication adds an extra layer of security beyond just a password. Set up 2FA on important accounts like email, social media, and financial services. You’ll need to enter a randomly generated code from an app or SMS text message when logging in from a new device. This makes it much harder for hackers to access accounts.
Limit Data Collection from Apps
Be selective when approving app permissions. Don’t grant access to contacts, photos, microphone, location, etc. unless absolutely required for functionality. Also, limit the sharing of data with third parties in the app’s privacy settings.
Use a Password Manager
Password managers like LastPass and 1Password allow you to use long, unique passwords for every account. This makes you far less vulnerable if any one site is breached. The password manager encrypts and stores all your passwords behind one master password.
Browse Privately
Enable private browsing modes and clear cookies to prevent websites from tracking your browsing history. Browser extensions like Privacy Badger and uBlock Origin can further protect you from ads and trackers following you around the web.
Review Privacy Policies
Read privacy policies thoroughly before signing up for new services. Make sure you understand exactly what data is being collected and how it will be used or shared with third parties. Avoid services that collect more information than required.
Opt-Out of Data Broker Services
Places like the DMAChoice allow you to opt out of data collection by many major data brokers. However, this is an imperfect solution given the vast number of brokers in operation.
Total privacy online is impossible, but following common sense precautions can help regain some control over how your personal information gets accessed and used.
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