What Is a Data Broker in 2024? Everything You Need to Know About Your Personal Data

In the digital age, information has become a valuable commodity. Behind every click, purchase, and social media interaction lies a vast industry fueled by one thing—data.

But what happens to all that personal information you’re generating online? This is where data brokers come in. So, what are data brokers? These entities are largely unknown to most consumers but play a crucial role in collecting, selling, and managing your personal data.

In this Mysterium VPN blog post, we’ll give you the 4-1-1 on everything you should know about data brokers and the relationship they have with your sensitive information.

What Is a Data Broker?

Let’s start with the basics: what is a data broker?

A data broker, also known as an information broker, is a company or entity that collects information about individuals from a variety of sources, aggregates it, and sells it to other organizations.

These other organizations might include marketers, advertisers, financial institutions, or even fraud detection agencies. Essentially, data brokers act as middlemen in the data economy.

While this might sound like a behind-the-scenes industry, it’s actually enormous. The data brokerage industry includes hundreds of companies and is expected to grow even larger by 2024 as businesses increasingly rely on consumer data for decision-making.

Some of the largest data brokers in the world include Acxiom, Experian, and CoreLogic, but there are many data brokers operating on a smaller scale, collecting information from a variety of commercial sources and public records.

You’re Likely Already in a Data Broker’s Database

Even if you’ve never signed up for a data service or knowingly handed your information to a third party, your personal data is probably already in the hands of data brokers.

From public records like court records, marriage licenses, and motor vehicle records to online activity like browsing habits or purchase history, data brokers collect information from countless sources.

For example, if you’ve ever registered to vote or applied for a loan, your information may have been shared or sold to third-party data brokers. Learn more about it below!

‍How Do Data Brokers Collect Information?

So, how do information data brokers collect information about you? It’s not as mysterious as it may seem.

Data Brokers Can Access Surprising Sources of Data

In addition to public records, data brokers may gather information from more obscure sources. For instance:

• Online quizzes you take for fun may seem harmless, but they can be designed to gather personal details about your preferences, behaviors, and even psychological traits.
• Social media platforms and apps are gold mines for data brokers. Even with privacy settings enabled, some information can still be accessed through partnerships or third-party app agreements.
• Voter registration information and census data are also used to refine consumer profiles. These pieces of data help data brokers make inferences about your political leanings, household size, income bracket, and more.
  

For instance, every time you fill out a form online, take a survey, or sign up for a social media app, your data might be harvested by a third-party data broker. Data brokers don’t just collect basic information like your name and address; they often gather much more detailed data. This can include:

• Marital status;
• Social media activity;
• Bankruptcy records;
• Census data;
• Criminal records;
• Financial data, like whether you've taken out a mortgage loan;
• Purchase history and browsing behavior;
• Sensitive data, such as health-related information (inferred from purchases or online searches).

This detailed data is used to create a highly accurate profile of who you are and which companies use for marketing or even for risk mitigation.

Credit reporting agencies like Experian, which you might assume only collect data relevant to your credit score, also sell data for other purposes.

These vast amounts of consumer data are then categorized and used to create comprehensive profiles of individuals—without them even knowing.

Data Brokers Are Often Invisible to Consumers

Unlike well-known companies like Facebook or Google, data brokers operate largely in the shadows.

You likely won’t know when a data broker has collected your information, and they usually don’t have a direct relationship with consumers.

Most people are unaware of the existence of companies like Acxiom, CoreLogic, or Dun & Bradstreet, even though they may hold extensive profiles of millions of individuals.

Some states like California and Vermont have implemented laws that require data brokers to register and disclose the types of data they collect.

What Do Data Brokers Do With Your Data?

Once data is collected, data brokers sell it to various companies for commercial purposes. For instance, if you’ve ever wondered how companies seem to know so much about you when you receive personalized ads, data brokers are often behind this.

There’s also an entire world of people search sites—services like Whitepages or Spokeo—that make their money by selling personal details to the public.

The data collected and sold by data brokers can have real-world impacts, often without you knowing it. For example:

• Targeted Advertising: If you’ve ever seen an ad for something you only thought about purchasing or mentioned in conversation, that’s likely because data brokers have compiled your interests based on your online behavior, purchase data, or social media activity.
• Insurance Rates: Health insurance companies and financial institutions sometimes use the information collected by data brokers to make decisions about premiums or whether to offer you services. While regulated, this use of data can affect what you pay for insurance or the types of financial products available to you.
• Creditworthiness: Credit reporting agencies are technically data brokers, and while they must follow regulations like the Fair Credit Reporting Act, they also share data beyond traditional credit scores. This means data brokers might sell your data to financial institutions, which use it to assess whether you’re a good credit risk or not.

Are Data Brokers Legal?

One of the most common questions is: Are data brokers legal? The answer is yes—but with some caveats. While data brokers operate legally, the regulations surrounding the industry are complex and vary by country.

In the U.S., for example, data brokers are subject to some laws like the Fair Credit Reporting Act (FCRA), which governs how credit reporting agencies handle data.

However, many aspects of the data brokerage industry remain under-regulated, particularly in how they collect and use data that is not credit-related.

Internationally, the European Union imposes stricter rules on data collection and requires data brokers to obtain consent before collecting personal data with their General Data Protection Regulation (GDPR). This has made the process of selling data much more difficult for data brokers operating in Europe.

Additionally, the Federal Trade Commission (FTC) has started taking a closer look at the practices of data brokerage companies. Recently, the FTC has required some companies to provide consumers with the ability to opt out of data collection, but this is still a developing area of law.

One major concern is data breaches. Sensitive information like criminal records, financial data, and private details on social media accounts can all end up in the wrong hands due to a breach.

In fact, some of the largest data breaches in history have involved data brokers. In such cases, the legal ramifications can be severe, but they often fall more heavily on the companies that purchased the data, not on the brokers themselves.

How to Opt-Out From Data Brokers

If you’re concerned about your personal information being shared, you do have options to opt out of data collection, but it’s a complicated process.

Many data brokers offer an opt-out feature, but it’s not always easy to find, and even when you opt-out, it doesn’t mean all your data is erased.

Additionally, each data broker may have a different opt-out procedure, and because there are hundreds of data brokers, it can be a time-consuming task to contact them all. Some services like DeleteMe or StopDataBrokers can help manage these requests, but they typically charge a fee.

Data Brokers and Data Breaches

Even if data brokers claim to keep your information secure, data breaches are a significant concern. In fact, some of the most significant data breaches in history have involved data brokerage companies.

When a data breach occurs, it exposes the sensitive data that data brokers collect—like credit card numbers, social security numbers, and birth certificates—to hackers, who may sell this data on the dark web or use it for identity theft.

This is why protecting your data through tools like VPNs, secure browsers, and strong passwords is so crucial. Continue reading to learn how you can protect your personal information from a rogue data broker.

How to Protect Your Personal Data from Data Brokers

Given the breadth of data collected, it’s natural to be concerned. How can you protect your personal information from landing in a data broker's hands? Fortunately, there are steps you can take:

1. Use a VPN: A VPN (Virtual Private Network) encrypts your internet traffic, making it harder for web tracking tools and data brokers to monitor your online activities. This is especially useful for masking your browsing behavior and location from prying eyes. A VPN creates a secure tunnel between your device and the internet, ensuring that your sensitive personal information remains private.
2. Check the Fine Print: Be sure to read the fine print before agreeing to any online service, whether it’s a social media app or a simple online quiz. Many times, companies will require consent to share your data with information brokers or third-party data brokers.
3. Opt-Out: Many data brokers provide an opt-out option, though it’s often buried deep within their data broker websites. By opting out, you can reduce the amount of data collection being done on your personal information. Sites like StopDataBrokers provide guides on how to opt out of major data brokers.
4. Use Secure Browsers: Make sure to use a secure browser that blocks cookies and other tracking mechanisms. You can also enable privacy settings that prevent data brokers from collecting your browsing history and personal data.
5. Limit Social Media Exposure: Be cautious about the amount of personal information you share on social media. Data brokers regularly scrape private details of public social media accounts to build comprehensive profiles. Limit what you post, and ensure that your privacy settings are robust.
   

The Future of Data Brokers in 2024 and Beyond

As we look to 2024 and beyond, the data brokerage industry is expected to grow despite increasing scrutiny.

Major data brokers will likely invest heavily in data privacy technology and partnerships with financial institutions and credit card companies, maintaining their grip on the data economy.

Data Brokers Aren’t Going Away Anytime Soon

As we become more reliant on digital technologies and our online activities continue to grow, the data broker industry will only expand.

Data brokering is deeply ingrained in the modern digital economy, and companies will always have a demand for personal data to refine their marketing strategies, mitigate risks, and improve their services. While privacy laws may tighten in the future, it’s unlikely that data brokers will disappear entirely.

Additional Resources on Online Tracking

By becoming more informed, you can take steps to control your data and make more conscious decisions about what information you share online. After all, in a world where data is currency, knowledge is your best defense.

If you’re looking to dive a little deeper into this topic and explore the implications of data brokerage, we highly recommend watching this video from Last Week Tonight with John Oliver (HBO).

It provides a clear and comprehensive breakdown of the industry and offers practical tips on safeguarding your privacy in the digital age.

‍Final Thoughts

Understanding what a data broker is and how they work is crucial in protecting your personal data. While data brokers collect information from a variety of sources and use it for various purposes, you do have some control over how your data is used.

By taking proactive measures such as using a VPN, opting out, and securing your online presence, you can limit the amount of data that ends up in a data broker's hands.

While the world of data brokers may seem complex, it’s simply a reality of the digital age. As more of our lives move online, it’s essential to stay informed, vigilant, and proactive about your data privacy in 2024 and beyond.

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