What is a data broker

In today’s digital era, data brokers operate in the background, collecting and selling personal information for various purposes. This article aims to explain who these data brokers are, what they do, and how their activities might affect the average person.

We’ll examine the process of data collection, the nature of the data market, and the regulatory environment that attempts to keep the industry in check.

By understanding the role of data brokers, we can better grasp the value of our personal data and the importance of protecting it in a connected world.

What is a data broker?

A data broker is a business that collects personal information about individuals from a variety of public and private sources and sells that information to third parties. These sources may include public records, social media profiles, and other publicly accessible databases, as well as private purchase histories, warranty registrations, and subscription details. Data brokers amalgamate this data to create detailed profiles, often without the individual’s knowledge or consent.

These profiles can include a myriad of details such as age, gender, income, job history, consumer habits, financial status, health interests, vacation habits, and other personal information. The data is then sold to organisations for purposes that may include targeted advertising, credit scoring, risk mitigation, and market research.

While data brokering can aid businesses in personalising their services and offers, it raises significant privacy concerns. Many individuals are unaware of the extent of data collected and how it is utilised. In response, there is a growing call for tighter regulation of data brokers to ensure transparency and give individuals more control over their personal information.

How do data brokers work?

Data brokers function by collecting information about individuals from various sources, including public records, online activities, and purchases. They aggregate this data to create detailed profiles, which are then sold to organisations for purposes such as targeted advertising, credit risk assessment, and market research.

These brokers utilise sophisticated algorithms to analyse and cross-reference data to enhance its value. For instance, data from your online shopping habits might be combined with your social media activity to deduce your interests and potential spending behaviour.

While the industry is shrouded in some secrecy, it’s known that data brokers gather data through legal means, like scraping public websites and purchasing information from other companies. They also use less transparent methods, such as tracking cookies and mobile apps to monitor online behaviour.

What types of data do data brokers collect?

Data brokers collect a wide range of data types, which can be broadly categorised into several key areas:

  1. Personal Identifiers: This includes names, addresses, email addresses, and phone numbers which can be used to directly identify an individual.
  2. Demographic Information: Data such as age, gender, ethnicity, and income fall under this category, which is used to build profiles for marketing and analysis.
  3. Web Browsing Habits: This encompasses websites visited, search history, and online purchases, providing a glimpse into consumer behaviour and interests.
  4. Social Media Activity: Posts, likes, and follows can offer insights into a person’s preferences and social circles.
  5. Location Data: GPS data from smartphones and other devices track where individuals go, which can be used to infer patterns and routines.
  6. Public Records: Information from government records such as birth certificates, marriage licences, and court documents is also harvested.
  7. Consumer Surveys: Responses from voluntary consumer surveys provide additional layers of personal preferences and opinions.
  8. Credit Information: Data brokers may use credit scores and loan histories to determine an individual’s financial reliability.

These data types are aggregated to form extensive profiles that can be used for targeted advertising, risk assessment, and other purposes by various industries. The collection and use of such data are subject to regulatory scrutiny due to privacy concerns.

Why do data brokers collect personal information?

Data brokers profit from personal information by collecting, analysing, and packaging this data to sell to third parties. These buyers may include marketers, advertisers, insurance companies, and financial institutions that use the data to target potential customers, assess risk profiles, or even make hiring decisions. Profits are generated through various means:

  1. Selling Datasets: Brokers sell large datasets that contain demographic information, consumer habits, and lifestyle preferences to companies that can use this data for targeted advertising and market research.
  2. Customised Reports: Brokers create tailored reports for clients who need specific information, such as the likelihood of a consumer demographic to purchase a new product.
  3. Risk Mitigation: Insurance companies and lenders use personal information bought from brokers to assess the risk levels of potential clients and set premiums or interest rates accordingly.
  4. Subscription Services: Some data brokers operate on a subscription model, granting continuous access to updated data for a regular fee.
  5. Lead Generation: By analysing consumer data, brokers identify potential leads for businesses and sell this information to companies looking for new customers.
  6. Affiliate Marketing: Brokers might use personal data to direct targeted affiliate marketing efforts, earning commissions on sales generated from leads.
  7. Data Analysis Services: Brokers also provide services to analyse the collected data, giving insights that companies might not have the internal capability to generate.

In all these ways, data brokers turn the personal information they aggregate into a commodity, capitalising on the demand for data-driven decision-making in the contemporary business landscape.

Can I stop data brokers collecting my data?

It is challenging to completely stop data brokers from collecting your data, as they often gather information from various public and semi-public records, as well as from online and offline behaviours.

However, there are measures you can take to removing yourself from data brokers databases, reduce the amount of information that is available to them and increase your online privacy.

  1. Data Broker Removal Services: Engaging a data broker removal service can be the most efficient option. These services work on your behalf to remove your information from a multitude of data broker databases. They are adept at navigating the complex opt-out processes that individual data brokers have in place.
  2. Opt-Out Directly: Many data brokers have opt-out procedures, though DIY data removal can be extremely tedious and time-consuming. This involves contacting each data broker individually and requesting the removal of your data.
  3. Online Footprint: Limit what you share on social media and online forums. Adjust your privacy settings to restrict who can view your personal information.
  4. Data Protection Tools: Use browser extensions and privacy-focused browsers that limit tracking cookies and data collection.
  5. Secure Your Accounts: Create strong, unique passwords for all your online accounts and enable two-factor authentication wherever possible.
  6. Monitor Your Data: Regularly check what information about you is publicly available and take steps to remove or secure it.

While these steps can significantly reduce the likelihood of your data being collected and sold, it is nearly impossible to remove your digital footprint entirely. Data broker removal services stand out as the most effective method because they continuously monitor and remove your data, which is a continuous process given that brokers often repopulate their databases.

Patch Bowen
Patch Bowen is an accomplished technology journalist with a solid academic foundation, holding a degree from Auckland University. His expertise spans across a range of tech topics, with a notable focus on product reviews, industry trends, and the impact of technology on society. With his work featured on major New Zealand websites like Stuff.co.nz, thebit.nz, and The Press, Patch has established himself as a credible voice in technology media. His articles are known for their detailed analysis and practical insights, particularly in making complex technological concepts understandable for a broad audience. At ReviewsFire, Patch is renowned for his thorough evaluations and clear, informative writing style. He has a knack for identifying and explaining the nuances of the latest gadgets and digital trends, earning him a reputation as a trusted source for tech advice and information.

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