The Secret Life Of Data Brokers, And What They’re Selling About You

As we’ve discussed previously, your personal data is a commodity that’s gathered, bundled, and sold, with a price tag ranging from 20 cents to hundreds of dollars.

Collecting and distributing this type of information is the task of data brokers. Also called information brokers, data vendors, and information resellers, data brokers collect and aggregate consumer information and sell individual or bundled profiles for a variety of purposes.

According to the FTC, data brokers can be defined as:

“companies that collect information, including personal information about consumers, from a wide variety of sources for the purpose of reselling such information to their customers for various purposes, including verifying an individual’s identity, differentiating records, marketing products, and preventing financial fraud.”

This doesn’t sound sinister, and such business really is par for the course in today’s world. But the nitty gritty of data brokering is slippery when it comes to ethics, privacy, and transparancy — especially when the practice is used to help the government subvert privacy laws.

Data scooped, and where it comes from

The consumer information gathered by data brokers comes from a variety of sources. These include:

  • Public records: Demographic information like name, address, email, phone number, social security number and more[contextly_sidebar id=”w3V9doLiQCQhTXtuyPBtVBGOGXooQD6h”]
    Self reported information: Information you list through online and offline sweepstakes, contests, and applications
  • Social media: Demographics, occupation, political affiliation, religion,relationship status, schooling, friends, and interests through social sites like Facebook and Linkedin
  • Purchasing and licensing records: Your web spending habits and browsing activity, from advertising networks and cookie tracking

That’s a lot, but some other types of data are protected by law, including your credit reports and medical records. But that doesn’t mean they can’t sell health-related data from the size of clothes you buy, and medications or ailments you research.

What’s compiled, and who it goes to

Once data brokers have this wealth of information compiled into intimate, highly-detailed profiles, they can be sold as several different products:

  • Marketing products: Used by marketers target you with products and services tailored to your demographics, purchasing history, and “life trigger” events
  • Risk mitigation products: Used by clients (usually banks) to confirm individuals’ identities, prevent fraud, and verify information
  • People search products: Used by organizations, law enforcement, private investigators, and the media for detailed personal information on individuals

These products are typically individualized toward the client instead of being all inclusive — for example “individuals who buy mystery novels” or “soon to be parents.” According to one data broker company, Axcion, “No individual record ever contains all the possible data.”

Who is the buyer? According to

“…customers may include financial institutions, insurance companies, the hospitality industry, cable and telecommunications companies, political campaigns, retail stores, and even government entities and law enforcement agencies.  In addition, many data brokers sell or exchange information with other data brokers.”

Emphasis on government entities is ours, because the breadth of such sharing could get even murkier with a new bill. According to the Guardian, the Cybersecurity Information Sharing Act (Cisa) would grant broad latitude for data brokers to mine user information and share it to federal entities, who could share it throughout the government.

Even Homeland Security admits this surveillance bill could sweep away important privacy protections for American citizens.

Privacy, transparency, and other concerns

If you’re thinking, “yikes, that’s more information than I know about myself,” or “was anyone planning to ask my permission?,” you’re not the only one. Many people are concerned about problematic implications of data brokerage.

The potential for government agencies to use data brokers to access information otherwise illegal for them to obtain is, obviously, one major perceived threat to civil liberties.

Other issues include

  • Data brokers circumvent privacy laws: they aren’t required to disclose information to the public or ask user consent, and aren’t regulated
  • Data brokers can be predatory: people with financial troubles can be targeted by predatory lenders, or people charged more money based on their socio-economic profile (called “digital redlining”)
  • The data may not be accurate: If the data on you is wrong, which is often will be, in most cases you can’t correct it
  • Opting out? Nice try: Some companies let you opt out of data collection, but it’s difficult to do

Some surmise that despite potential drawbacks, big data and data brokering in general is more beneficial to consumers than it is harmful. Even so, calls for better regulation and increased transparency will likely remain to prevent the frightening possibility of data abuse.


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Jennifer Markert