Different Kinds of Data Brokers

by Adrian Yang

Different Kinds of Data Brokers

Why Data Brokers Are Becoming a Hot Topic

Until relatively recently people were blissfully unaware of the data broker, and the role they played in targeting the customer. It has only been recently that abuse of data and data ownership have become an everyday conversation, and even now people are not highly educated about how their data has been used to target them for marketing, and could conceivably be used for surveillance. Tom Kemp points out that these data brokers have been making a lot of headlines of late as it relates to these companies selling and sharing very sensitive personal data such as our location (e.g., people going to/from abortion clinics), what types of healthcare apps we have installed (e.g., pregnancy trackers), our religion (e.g., people who have a Muslim prayer app installed), our sexuality (e.g., if you are using a gay/bi dating app). As an expert in enterprise cybersecurity, he understands that your simple Smartphone device can hold a footprint that holds an extraordinary amount of information about you. Recently, we have had battles in the US over abortion, where states were fighting over abortion bans, and how to enforce. Period tracking apps became part of the conversation, with lawyers telling women to delete them, to prevent anyone from implicating themselves from any possible crimes. The abortion ban, plus issues with social media made people more aware of data abuse, and all of a sudden, people are interested in how data brokers operate. 

What is a Data Broker?

Broken down to the lowest common denominator, a data broker is simply a company that aggregates personal data. It then sells the data. The people whose data is being collected are actually not usually aware of the process-for example-when your bank runs your credit check for a loan, it runs a program that shows all your financial activities, past addresses, employers, etc-but you didn’t put the file together. The program they use did. They hired a data broker. As of now, in the US, data brokers are unregulated. They can sell your data pretty much as they please, which is why you should pay attention to the apps you buy, and who you give permission to to use your info-say, when you go shopping, and a cashier asks for your email. Social media sites are also notorious for simply taking data.

data being sold for profit

Different Types of Data Brokers

Here are a few common data brokers we see in everyday use. They usually fall under one of 4 categories:

  • Marketing and advertising data brokers.
  • Financial data brokers.
  • People search.
  • Personal health data brokers.

How Targeted Ads Work

Have you ever been spooked by an ad that appears on your Smartphone after you had a conversation about a certain product you liked? Or used a certain laundry detergent, then received a digital coupon for the same one? This is the work of data brokers. They know what you like, they know your preferences, and they know how to find you. That is their purpose as a marketing and sales data broker. They are built to know YOU. They use the knowledge they buy to find out everything they can about what you like to purchase, preferred brands, and what you are interested in as a consumer.  Data brokers typically gather information through what’s publicly available on the internet and by buying it from other organizations, such as credit card companies. Common avenues for data sourcing are social media sites, public records, loyalty programs, and mobile apps.The US doesn’t have any Federal laws protecting data, although states are starting to. We have had several scandals-notably with social media and elections in which data brokers used information unethically, and there are actually data brokers used by the US Government. According to a Business Insider report, several US government agencies, such as the FBI and the Department of Homeland Security, are clients of Venntel, a massive US-based data broker. Once again, we look at convenience versus privacy. That’s how we get those coupons!

Financial Data Brokers

Another form of data broker we are familiar with is financial data brokers-these include the credit reporting agencies, like Experien, Equifax, and TransUnion. They gather information on financial behavior and risk, and aggregate it-building up a score to assess risk used for everything from credit card APR to mortgage terms. This one score determines a lot of a person’s financial life, and most people are not even aware of how it works. Banks also use data broker programs to assess clients terms internally for services, using proprietary programs individually for each bank. 

Truth about Data Privacy

Ever wondered what happened to your ex boyfriend from high school? Or wanted to check out your new roommate? A quick search on PeopleFinder.com will spit out all the information available on them. It will include public records, addresses, prison history, everything you need that’s public. While it won’t totally replace a Private Investigator, it comes close, and is cheaper, and more convenient. You can also run it on yourself to see what information is available on you. Perhaps most startling is the fact that there are data brokers for personal health information, which most people assume is covered by HIPAA laws. They aren’t, as long as the data is not traceable to specific patients. According to Slate magazine, in an article written by Justin Sherman, the data brokerage ecosystem—broadly, companies collecting, inferring, buying, selling, licensing, and otherwise sharing people’s data—is a multibillion-dollar industry in the United States. Companies most of us have never heard of, like Acxiom or Babel Street, transact in everything from individuals’ demographic information (race, sex, gender, and much more) to locations to political preferences and beliefs. They compile datasets on individuals, package them, and make them available on the open market, for sale, advertising, or other purposes. This is very much of interest to consumers, and several bills have been introduced to Congress that haven’t passed. At some point, as education on the personal data front escalates, we may see more legislation.

by Adrian Yang Dec 14, 2022