Data Brokers: The Oil Snakes of the Digital Era

What Are Data Brokers?

Data brokers, also known as information brokers or data vendors, are companies that specialize in collecting, aggregating, and selling personal information about individuals to third parties.

This data can include everything from your name, address, and contact details to your online behavior, purchasing habits, and even your medical history.

Data brokers operate in the shadows of the digital landscape, often going unnoticed by the average internet user.

What Do Data Brokers Do?

Data brokers play several roles in today's data-driven world:

Data Collection: They gather information from numerous sources, including public records, social media, surveys, online transactions, and more. Some data brokers also purchase data from other companies or organizations.

Data Aggregation: Data brokers consolidate this information into detailed profiles or databases, categorizing individuals based on their interests, demographics, and behaviors.

Data Profiling: By using sophisticated algorithms, data brokers create in-depth profiles of individuals. These profiles can be used to predict future behavior, interests, or potential purchases.

Data Sale: They monetize this data by selling it to other businesses, such as marketers, advertisers, credit agencies, or government entities. These buyers use the data for a variety of purposes, from targeted advertising to risk assessment.

How Do Data Brokers Obtain Data?

Data brokers employ an array of tactics to acquire your personal data, often with minimal oversight:

1. Online Tracking: They use cookies, web beacons, and other tracking technologies such as browser fingerprinting to follow your online activities, even when you're not directly interacting with them.
2. Data Sharing: Data brokers may partner with websites and apps that share user data in exchange for financial compensation or services.
3. Public Records: They access public records, such as property records, court documents, and business registrations, to build their databases.
4. Surveys and Contests: Data brokers might sponsor surveys and contests as a way to gather additional information about individuals.

What Do Data Brokers Do with Your Data?

Data brokers' clients come from diverse industries, and they use your data for various purposes, including:

Targeted Advertising: Marketers rely on data broker information to create highly personalized advertisements, improving the chances of a sale.

Credit Scoring: Credit bureaus use data broker data to assess an individual's creditworthiness, which can impact your ability to secure loans or mortgages.

Fraud detection: Banks and e-commerce companies often use the services of data brokers to help verify the identity of customers and prevent fraudulent transactions.

Employment Screening: Employers may consult data brokers to vet potential employees, leading to decisions that could affect your career.

Government Surveillance: Some government agencies access data broker databases for surveillance, national security, or law enforcement purposes.

Data appends: A data append company specializes in enhancing and enriching existing databases by adding missing or additional information to them. They take a client's database that has details missing and they go about filling in the gaps.

Examples of Data Brokers

As you can see, there is a wide range of data broker companies collecting different types of data and distributing it for different reasons.

Here are some notable examples of data broker companies and what they do:

Acxiom: One of the oldest and largest data brokers, Acxiom has a treasure trove of consumer data. They collect data from various sources, including online and offline transactions, surveys, and public records, to build detailed consumer profiles. These profiles are sold to a wide range of clients, including marketers, advertisers, and political campaigns.

Experian: Best known as a credit reporting agency, Experian is also a significant player in the data broker industry. They provide consumers' credit history and other personal data to financial institutions, retailers, and marketers to help assess creditworthiness and target consumers with offers based on their financial behavior.

Equifax: Another major credit reporting agency, Equifax, compiles credit reports and credit scores for individuals. They also sell this data to businesses, including lenders, insurers, and debt collectors.

CoreLogic: CoreLogic focuses on property-related data, providing information on real estate, mortgages, and insurance. They serve industries like real estate, lending, and insurance and offer data on property values, homeowner history, and flood risk.

Dun & Bradstreet: This data broker specializes in business data and insights. They provide information on businesses, including financial data, corporate hierarchies, and industry insights. Clients use this data for risk management, lead generation, and business-to-business marketing.

Epsilon: Epsilon is a data broker that specializes in marketing data. They collect data on consumer behavior and preferences, which is used by marketers and advertisers to create highly targeted marketing campaigns.

LexisNexis: LexisNexis is known for its extensive legal and public records databases. They provide data on individuals, businesses, and legal matters to law firms, government agencies, and other clients.

What risks do data brokers pose to your privacy?

Data brokers pose several significant risks to your personal data and online privacy for several reasons:

Data Collection Without Consent

Data brokers often collect your personal information without your explicit consent or knowledge. They source data from various online and offline activities, including social media, online transactions, public records, and surveys. This data collection occurs in the background, leaving you unaware of how much information is being gathered.

Data Aggregation

Data brokers aggregate data from multiple sources to create detailed profiles of individuals. These profiles may include sensitive details like your financial history, medical records, and online behavior. The more comprehensive these profiles are, the greater the risk to your privacy, as they provide a more complete picture of who you are.

Data Monetization

Data brokers profit by selling this information to a wide range of clients, including advertisers, marketers, financial institutions, and even government agencies. Once your data is in their hands, it can be used for various purposes, such as targeted advertising, credit scoring, and even government surveillance.

Lack of Control

When your data is in the hands of data brokers, you lose control over how it is used and who has access to it. This lack of control means you may be subject to targeted advertising, data breaches, or unintended consequences due to the information they have about you.

Inaccurate Data

Data broker databases are not always accurate. Errors in your data can have real-world consequences, such as impacting your credit score or job prospects. These inaccuracies can be challenging to correct because you may not even know where the data originated.

Data Breaches

Data brokers are attractive targets for hackers due to the valuable information they hold. Data breaches at these companies can expose your personal data, making it vulnerable to misuse, identity theft, and other fraudulent activities.

Limited Transparency

Data brokers typically operate behind the scenes, making it difficult for individuals to know which companies are collecting their data, what data is collected, and how it's being used. This lack of transparency hinders your ability to make informed decisions about your online activities and data sharing.

Privacy Erosion

The constant data collection and profiling by data brokers contribute to the erosion of online privacy. It can feel as if there's no safe space left where your personal information remains confidential.

Protecting Your Data

It's important to note that many data brokers operate behind the scenes, and their data collection methods are often not immediately obvious to consumers. But there are a few things that you can do to reduce their reach into your own personal data:

1. Use Privacy Tools: Employ privacy-focused web browsers like Tor, install ad-blockers, use VPNs to hide your IP address, or use Hoody to stop all data tracking including browser fingerprinting.

2. Check Privacy Settings: Regularly review and adjust the privacy settings on your social media accounts and online services.

3. Limit Data Sharing: Be cautious about sharing personal information, even on seemingly harmless surveys and contests. Also, limit what information you share on social media profiles.

4. Opt-Out: Explore online resources, like the Digital Advertising Alliance's opt-out tool, to remove yourself from data broker databases.

5. Encrypt Your Data: Use end-to-end encryption for messaging and consider encrypting your emails. Look into privacy-focused email providers or consider using burner emails.

6. Educate Yourself: Stay informed about data protection regulations and digital privacy developments, and support initiatives that advocate for stronger data privacy laws.

Don't Let the Data Hounds Get Your Data

Data brokers have been accessing and making a profit from our personal data for decades. Being aware of their existence and how they operate means you can take the necessary steps to protect your data and take back control of your online privacy.

One of the tips we mentioned above is to use an ad blocker. Read more about them here: What is an Ad Blocker and How Do They Work?