Whenever we think of data-privacy scandals, two names often dominate the headlines: Facebook and Google. We’ve become all too familiar with their controversial data brokering practices, their privacy missteps splashed across news outlets and sparking investigations.
But what if we told you that they are just the tip of the iceberg and there exists a shadowy underworld of companies operating just beyond the spotlight, silently profiting from your personal information and they are data brokers.
Data brokers – an overview
Ever heard the terms “information broker” and “data broker” thrown around? They are sometimes used interchangeably. Data brokers silently operate in the background, gathering information on people without establishing a direct relationship. Sneaky, right? The scariest part is that most individuals remain unaware that their data is being collected.
They operate in the dark and unknown to most internet users, quietly reaping the rewards of your digital footprint. Globally, there are approximately 5000 data broker sites operating and making profits on your personal data. According to recent research, the global data broker market had a value of USD 319.030 billion in 2021. Recent figures show that the data brokerage industry is multiplying at a rate of 7.96% and is expected to be worth US$545.431 billion by 2028.
According to the Los Angeles Times, the well-known data broker companies include Equifax, Spokeo and TransUnion, and they all are a part of the million-dollar industry.
How data broker companies collect information
From the moment you enter the internet, your actions leave behind digital breadcrumbs. Whether you’re Googling, using mobile apps, engaging on social media platforms like Facebook, Twitter, or Instagram, or simply carrying out your routine online activities, you’re unwittingly generating valuable information that could end up in the hands of data broker companies.
Data broker sites quietly collect these fragments of information, weaving them together to form a comprehensive profile. But their reach extends far beyond the virtual world. They tap into offline sources too, such as
- Web browsing history
- Public sources (birth certificates, marriage licenses, divorce records, voter registration information, court records, bankruptcy records, motor vehicle records, and census data).
- Credit card information.
- Commercial sources (purchase history–what you’ve bought, when you bought it, how much for, and whether you used a coupon or loyalty card).
- Consent (whenever you sign up for different loyalty or programs).
- Personal information (name, address, age, email address, gender, political views, criminal records).
- Application programming interfaces (APIs) (from social media sites, mobile apps, and e-commerce sites).
How data broker companies make profit
Data brokers operate as the gatekeepers of a lucrative industry, capitalizing on the information they have meticulously collected. But how do they turn data into profit? It’s all about packaging and licensing.
Rather than selling data in the traditional sense, data brokers curate valuable datasets and offer them to companies in carefully crafted packages. These packages help businesses design or market their products and services with precision. By tapping into these data packages, companies gain insights that develop their strategies and help them connect with their target audience more effectively.
However, it’s important to note that data brokers retain ownership of the intellectual property or data itself. They don’t give control entirely. Instead, they grant permission for its use and commercialization through licensing agreements. This arrangement ensures that the data remains under the broker’s ownership, while still allowing companies to leverage its power.
When it comes to pricing, data brokers have the freedom to set their own rates. The value assigned to a particular data package depends on various factors. Detailed and sensitive information commands a higher price tag, reflecting its potential impact and usefulness to businesses.
How data broker sites leverage your personal data
In the vast world of data brokers, selling your personal information is a thriving business. With an abundance of eager potential customers, these companies find no shortage of buyers ready to snatch up your data. Once your information is in their possession, a variety of interested parties come knocking.
Personalized advertisement
Have you ever received a mind-blowingly relevant advertisement in your mailbox? The kind that seems to know your deepest desires or current life situations?
Or picture this: you’re casually browsing the web when suddenly, a banner ad pops up for the exact laundry pods you’ve been using. Coincidence? Not quite. Behind the scenes, data brokers may be the puppet masters pulling the strings.
These data brokers thrive on selling your shopping and spending habits to businesses. They know which brand of laundry soap you’ve purchased in the past, when you bought it, and when you’re likely to need more. Armed with this knowledge, companies can strategically send you ads precisely when you’re running low on those trusty laundry pods.
It’s no wonder that businesses have become some of the most active customers of data brokers. They recognize the power of personalized marketing and how it can drive their success in a crowded digital landscape.
Fraud detection
The influence of data brokers extends beyond marketing and advertising. Some businesses tap into your information to detect fraud. When you apply for an auto loan, lenders scrutinize the data unearthed by data brokers to ensure that the information you provided matches up, guarding against fraudulent applications.
Risk-mitigation
These types of data broker sites use a person’s search history to offer them high-interest (high-risk) loans rather than low-interest (safe) loans. Mortgage lenders, banks, and credit companies are all interested in your financial profile. They want to know how much you owe, the loans you’ve paid off, any missed payments, your income, job history, and even the websites you frequent.
Armed with this knowledge, they can entice you with offers tailored to your unique circumstances.
People-search sites
And let’s not forget the people-search sites. These sites allow you to uncover a treasure trove of personal information for a fee. But where do they get this data? You guessed it—data brokers. They collect public records and sell them to these sites, giving anyone willing to pay access to phone numbers, addresses, ages, birthdates, and more.
How to protect your data from data brokers
In our digital age, every online action we take becomes a data puzzle piece, shaping and influencing our digital experiences. It’s a trap that seems impossible to evade for most consumers. Companies intentionally make opting out of data collection a challenging and time-consuming process, leaving us feeling constrained and coerced. But fear not, there are solutions on the horizon.
However, it’s not just about relying on advanced tools. It’s also about making conscious choices and aligning yourself with brands that respect and safeguard your personal data.
Read more: How to Erase Yourself from the Internet
Enter the world of privacy-first solutions like PurePrivacy, a game-changer in the battle against data brokers. It’s a breakthrough solution that puts you back in control of your information by reclaiming your personal information from the internet and data broker sites.
Data broker removal might seem intricate, but with PurePrivacy, it’s just a click away. The data broker removal gives PurePrivacy a limited power of attorney agreement that allows it to act on your behalf to protect your privacy. It also withdraws any consent along with restricting data broker companies from processing your information.
