What are Data Brokers? How to Protect Your Personal Data
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By Farrukh Mushtaq
Farrukh Mushtaq
See author profileFarrukh Mushtaq, a digital marketer at PureSquare, possesses a keen interest in cybersecurity and enjoys writing about it. With several years of experience in the digital marketing industry, he brings expertise and passion to his work.
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17 October 2024
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18 mins read
Data brokers are companies that collect, analyze, and sell personal information to ad agencies or interested parties. By gathering data from various sources, including public records, social media, and online activity, these companies create detailed user profiles (name, email, SSN, IP address) that can be sold to businesses for marketing, risk assessment, and other purposes.
Where Do Data Brokers Collect Your Information?
Data brokers collect information from a variety of sources, both public and private, and combine information from multiple sources to create comprehensive profiles of individuals, making it difficult to track the origin of specific data points. Here are some of the primary ways they obtain your personal data:
Public Records
- Government agencies: Birth certificates, marriage licenses, property records, and court documents can be valuable sources of information for data brokers.
- Publicly accessible databases: Online directories, social media profiles, and other publicly available information can be scraped and compiled by data brokers.
Commercial Data Sources
- Retailers: Purchase histories, loyalty card information, and other customer data can be sold to data brokers.
- Financial institutions: Credit reports, bank account information, and loan applications can be valuable data points.
- Telecommunications companies: Phone records, internet usage data, and device information can be shared with data brokers.
Online Activity
- Websites and apps: Cookies, tracking pixels, and other technologies can collect information about your browsing habits, preferences, and online interactions.
- Social media: Posts, comments, likes, and other activities on social media platforms can be used to build profiles of individuals.
Data Aggregators
- Third-party data providers: These companies specialize in collecting and aggregating data from various sources, which they then sell to data brokers.
What Are the Types of Data Brokers?
Data brokers can be classified into six primary categories based on their specific focus:
Marketing Brokers
These companies gather and sell information about your browsing habits, purchase history, and everyday interests. They are responsible for running personalized marketing campaigns and targeted online ads that you usually see on your mobile phones and computers.
Recruitment Data Brokers
These brokers compile and use your personal information to provide background screening services for human resources departments.
Risk Mitigation Brokers
These companies collect and sell a range of background information, criminal records, property records, and other data to generate assessment reports for investment and business firms.
People Search Brokers
Often accessible for free, these brokers offer extensive profiles, contact details, and background information about you.
Financial Information Brokers
These companies gather various personal finance and background data to assist credit companies and banks in building credit scores, which can impact loan eligibility.
Health Information Brokers
These brokers collect information about your general health and sell it to healthcare companies. This data can be used for targeted health product advertising and event insurance rate setting.
How is Your Data Used?
Data brokers collect and sell your personal information to a variety of businesses and organizations. This data can be used for various purposes, including:
Marketing and Advertising
Data brokers help companies create targeted ads based on your personal interests, demographics, and online habits and behavior. Businesses and ad agencies use such data to understand consumer preferences, emerging trends, and product market-fit opportunities.
Risk Assessment
Your financial data can be used to calculate your credit score, which affects your ability to obtain loans and credit cards. Insurance companies use data to assess your risk and determine your insurance premiums. Your data can also be used to identify and prevent fraudulent activity.
Customer Profiling
Businesses can use data to divide customers into groups based on shared characteristics. Data can help companies identify potential customers and develop targeted marketing campaigns.
Product Development
Your data is used to understand customer needs and preferences, helping businesses develop new products and services.
Location-Based Services
Your information can be used to provide location-specific recommendations for businesses, restaurants, and other services.
Who are the Largest Data Brokers?
The data brokerage industry is vast, with thousands of companies operating worldwide. However, a few dominant players control a significant portion of the market. Here are ten of the largest data brokers:
Experian
Known for its credit reporting services, Experian also collects and sells a wide range of consumer data, including demographics, location, and online behavior.
Equifax
Another major credit reporting agency, Equifax also offers data analytics and marketing services.
TransUnion
A third major credit reporting agency, TransUnion collects and sells consumer data for various purposes, including risk assessment and marketing.
Acxiom
A global leader in data-driven marketing, Acxiom collects and analyzes consumer data to help businesses personalize their marketing campaigns.
Epsilon
A subsidiary of Publicis Groupe, Epsilon is a leading provider of data-driven marketing solutions, offering a wide range of services, including data acquisition, analytics, and campaign management.
Oracle Marketing Cloud
Oracle's marketing cloud platform offers data management, analytics, and personalization tools to help businesses understand and engage with their customers.
CoreLogic
The CoreLogic platform provides businesses with insights into property valuation, consumer credit, mortgages, capital markets, and tailored credit reports.
Salesforce
Salesforce is a leading customer relationship management (CRM) platform that also offers data analytics and marketing automation tools.
Infogroup
A provider of data and analytics solutions, InfoGroup offers a wide range of data products, including business data, consumer data, and location data.
ID Analytics
ID Analytics specializes in fraud prevention and identity verification solutions, using data analytics to help businesses detect and prevent fraud.
What Do Data Brokers Do with Your Data?
Data brokers collect and sell your personal information to businesses and organizations. They use this information for various purposes, such as targeted advertising, risk assessment, and market research.
For instance: You're walking through a shopping mall. As you pass by a store, your smartphone, which is constantly emitting location signals, is detected by the store's WiFi network. If the retailer knows you're a frequent shopper at their store and you're currently in the mall, they might send you a push notification offering a discount on a product you've previously expressed interest in.
What Personal Information Do Data Brokers Collect?
Data brokers collect a wide range of personal information, including:
- Age, gender, income, education, and occupation
- GPS coordinates, IP addresses, and cell phone tower signals
- Website visits, app usage, and social media activity
- Credit reports, bank account information, and loan applications
- Birth certificates, marriage licenses, property records, and court documents
- Name, address, phone number, and email address
- Hobbies, lifestyle choices, and purchase history
Data Brokers' Data Breach Examples
Your data is not safe with data brokers! Many data brokers have faced breaches that resulted in your privacy being used for malicious purposes, like phishing attempts and identity theft.
We have already witnessed Equifax and Experian data breaches in the past, let’s discuss some of the recent data leaks to understand how vulnerable your data is:
National Public Data Bankruptcy
National Public Data, a data broker, lost millions of Social Security numbers in a breach. The company filed for bankruptcy due to lawsuits and liabilities. They cannot afford to pay for credit monitoring for affected individuals and the insurance denied coverage and they have few assets. It's unlikely those affected will receive compensation.
Data brokerage National Public Data has filed for bankruptcy months after admitting that "hundreds of millions" of people were affected in one of the largest data breaches in history, according to The Register.
— Melissa Hallman (@dotconnectinga) October 13, 2024
The bankruptcy petition states: "The debtor is likely liable through… pic.twitter.com/wUWu3PmJW3
People Data Labs Breach
A massive data leak involving over 170 million records has been traced back to the US-based data broker, People Data Labs (PDL). The leaked data includes sensitive information such as full names, phone numbers, emails, locations, and professional details, putting individuals at risk of identity theft.
The breach was discovered on June 25, 2024, and was attributed to an unsecured Elasticsearch server. This incident raises concerns about the security practices of data brokers and the potential misuse of personal information.
Keenan & Associates Breach
Insurance brokerage Keenan & Associates recently disclosed a data breach affecting over 1.5 million individuals. The breach occurred between August 21 and 27, 2023, and compromised sensitive information like names, Social Security numbers, and health insurance details. Keenan has offered identity theft protection and implemented enhanced security measures.
23andMe Data Leak
In October 2023, a data breach at 23andMe exposed the personal information of around 14,000 customers. The attackers used stolen login credentials to access accounts. A $30 million settlement offers compensation to affected users. Depending on the claim type, payouts can range from $100 to $10,000. An official settlement website was launched for claim submission.
They had the most massive data breach.
— Brattani (@Bratt_world) September 18, 2024
Every piece of info shared (email, bday, address, cc, bloodline etc)
Sold to 3rd parties.
Think about that ….. pic.twitter.com/VdszhVT9J9
Are Data Brokers Legal?
Data Brokers are generally legal, but the specific regulations governing them vary widely across countries and jurisdictions. In the United States, there's no comprehensive federal law directly regulating data brokers, but individual states have enacted laws like the California Consumer Privacy Act (CCPA) to provide consumers with more control over their data.
In the European Union, the General Data Protection Regulation (GDPR) imposes strict data protection standards on companies, including data brokers, requiring explicit consent for data collection and granting individuals various rights over their personal information.
Similar regulations exist in other countries like Australia, Canada, and Brazil, ensuring that data brokers operate within defined legal frameworks and that individuals have safeguards to protect their privacy.
How to Protect and Remove Your Data from Online Data Brokers
Protecting your data from data brokers requires vigilance and effort. To safeguard your digital privacy, familiarize yourself with data protection regulations in your region, minimize sharing personal details on social platforms, and reduce the number of online accounts you maintain.
You must also avoid opening suspicious emails, and download apps exclusively from reputable sources. If you find all this hectic, try a reliable privacy management application, such as PurePrivacy.
Prevent Data Collection with PurePrivacy
- Stay anonymous with PureVPN at all times.
- View your privacy score to know how vulnerable your data is!
- Send automated data removal requests to 200+ data brokers.
- Receive progress of every data removal success.
- Get a privacy scan of all your social media accounts weekly.
- Download a free Chrome extension to prevent trackers.
- Receive dark web breach alerts on your devices.
Frequently Asked Questions (FAQs)
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How much do data brokers make?
According to ZipRecruiter, data brokers typically earn an average of $34.86 an hour. However, salaries can reach as high as six figures depending on location and experience. The industry's growth and the increasing value of data suggest that this trend is likely to continue.
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How does someone become a data broker?
Starting as a data broker often involves identifying a niche, collecting and processing data, enriching the data, building a customer base, ensuring compliance, and scaling the business. But you also need technical skills, business acumen, and a strong knowledge of data privacy regulations.
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Who buys data from data brokers?
Data brokers sell aggregated data to other brokers, advertisers, political campaigns, market research firms, businesses, and government agencies. Buyers use this data for various purposes like targeting customers, analyzing trends, and developing policies.
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Who are the largest data brokers in the US?
The largest data brokers in the US are typically big tech companies and specialized data firms. Some of the most prominent include Google, Facebook, Oracle, Experian, Equifax, TransUnion, Acxiom, and Nielsen.
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Is Google a data broker?
Yes, Google is considered a data broker. It collects vast amounts of user data through its search engine, products, and services.
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How do I remove my information from data brokers?
You can start by submitting opt-out requests to major data brokers. However, this process can be time-consuming and doesn't guarantee complete data removal. For a more efficient approach, consider using automated services like PurePrivacy, which can help delete your information from data brokers and prevent future data collection.
In Summary!
Data brokers play a significant role in the data market, and understanding their practices is crucial for protecting your privacy. While regulations are evolving, taking a proactive approach to protect your information is essential. Consider using privacy-focused apps and data removal services, such as PurePrivacy, offering an all-in-one privacy solution.
