In the modern digital era, individual data has transformed into a highly prized asset, commanding premium prices from businesses eager for insights into people’s lives. Everything from financial histories to political affiliations of a person can be documented and monetized by data brokers, giving rise to an industry worth billions of dollars.
This industry operates in the shadows, with few rules and regulations governing the collection and sale of personal data.
Despite the potential risks and dangers, people willingly give out their personal information without realizing it can be extracted and sold. Data brokers gather information from public sources, loyalty cards, and even vehicle licensing agencies, creating profiles that detail a person’s behavioral patterns.
These profiles can then be sold to marketing companies, insurance companies, and even governments, creating a web of data brokers selling to other data brokers.
Let’s take a closer look at the shady industry behind data collection…
Table of Contents
The Value of Data
Data Brokers
Data brokers are companies that collect and sell personal information to other companies. This industry is estimated to be worth over $200 billion and is largely unregulated. More than 4,000 companies in the US alone operate in this industry, gathering personal data without people’s knowledge, and then in turn negotiating sales of that data with other companies for a hefty profit.
Data Points
Data points are little bits of information that are very valuable to data brokers. These data points include personal information such as name, age, height, weight, where you live, where you work, family, friends, likes, dislikes, phone number, email, health conditions, buying habits, credit score, political beliefs, religious beliefs, and even who you text.
By collecting all these data points, data brokers can accurately predict an individual’s behavior and personality. They can determine a person’s political affiliations, age, whether they are looking to lose weight, whether they are a parent, and much, much more.
Essentially, data brokers take these data points, construct profiles from them, and then sell the profiles as their main product – a product that can accurately predict an individual’s behavior and personality.
Collecting Data
Public Information
The first step in collecting data is to gather public information. This includes information that can be found on social media pages, property records, court records, birth certificates, voter registration information, and bankruptcy records. All of these things can be publicly accessed and can provide valuable data points.
Purchasing Data
Another way to collect data is by purchasing it from companies that are willing to sell their customers’ information. Retailers, for example, know that a secondary source of income exists in the data about their customers’ purchasing habits.
Vehicle licensing agencies also have personal information about drivers that can be sold. Free websites, apps, and other services can also be used to collect data without users realizing it.
Tracking Online Behavior
Cookies and trackers on websites and apps can be used to track online behavior, including websites visited, news read, and online purchases made. This information can be used to create profiles that accurately predict a person’s political affiliations, age, weight, health conditions, etc.
Overall, collecting data involves gathering public information, purchasing data from companies, and tracking online behavior… and it all leads to one place: your profile.
Creating Profiles
Identifying Patterns
To create a profile, data brokers first need to identify patterns in the data they collect. By analyzing a person’s likes, purchase history, location, and other data points, data brokers can determine patterns in a person’s behavior.
Behavioral Predictions
Once patterns are identified, data brokers can make behavioral predictions about a person. For instance, by analyzing a person’s purchase history, they can predict whether they are health-conscious, whether they’re planning to go abroad, and even their religious affiliations.
By analyzing a person’s internet history, data brokers can even determine any health-related concerns a person may have.
Packaging Data into Profiles
After behavioral predictions have been made, data brokers sort and aggregate data from all the people they’ve taken data from, creating profiles that detail the behavioral patterns of each individual. This is “gold” for these data mining brokers.
Selling Data
Marketing Companies
Marketing companies are one of the main customers for data brokers. With access to large amounts of data, these companies can accurately target specific audiences and increase their return on advertising spend.
Data brokers can provide marketing companies with lists of people that fit certain criteria, such as health-conscious individuals or those interested in fitness. By selling these lists, data brokers can help marketing companies create more targeted and effective advertising campaigns.
Insurance Companies and Banks
Insurance companies are also interested in purchasing personal data. By analyzing a person’s behavioral patterns, insurance companies can determine the riskiness of a customer’s lifestyle and adjust premiums accordingly. For example, if a person has recently purchased a motorcycle, their health insurance premiums may increase.
Banks, meanwhile, can also use personal data to determine interest rates on loans and credit cards.
Governments
Governments are another potential customer for data brokers. They may be interested in tracking the exact location of certain individuals, especially those considered to be a person of interest. While the legality of this practice may be questionable, it is still a potential use for personal data.
Data Brokers
Finally, data brokers may sell data to other data brokers themselves. This creates a web of data brokers selling to other data brokers, with prices marked up based on the information being sold.
While the industry operates in the shadows, it’s estimated that the average email is worth $89 to a brand over time. The value of more personal data, such as political affiliations or health conditions, is difficult to estimate but is likely worth much more.
In conclusion, data brokers operate in a two hundred billion dollar industry by selling personal data to a variety of customers. While marketing companies are the main customers, insurance companies, banks, governments, and other data brokers are also interested in purchasing personal data. The industry operates in secrecy, with private marketplaces and word-of-mouth deals being the primary means of buying and selling data.
The Dark Side of Data
Lack of Regulation
The data broker industry operates with very few regulations. As a result, there are no clear guidelines on how to handle personal information or how to ensure its ethical use.
This lack of regulation means data brokers can collect, buy, and sell personal information without any oversight, and it can lead to the abuse of personal information and the exploitation of vulnerable individuals.
Privacy Concerns
The collection and sale of personal data raise serious privacy concerns. Individuals have a right to know what information is collected about them and how it’s used. However, data brokers often operate in secret, making it difficult for individuals to know what personal information is being bought and sold. This lack of transparency can lead to a loss of trust in institutions and a feeling of powerlessness among individuals.
Illegal Activities
The lack of regulation in the data broker industry can also lead to illegal activities. Data brokers are known to collect personal information without consent, sell information to fraudulent companies, and even engage in identity theft. These illegal activities hold serious consequences for individuals, including financial loss and reputation damage.
What you can do
In conclusion, yes, the data broker industry operates in the shadows, with very few regulations and little transparency. This lack of oversight can lead to the abuse of personal information, privacy concerns, and illegal activities.
So, it’s vitally important for individuals to be aware of the risks associated with the collection and sale of personal data, and also to demand greater transparency and regulation in the data broker industry.
Remove Your Data
To remove your data from data brokers, the best website we’ve found to do this is DeleteMyTrace.com. They offer personalized removal services, and can also scan the web to see exactly who is selling your data right now.
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