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May 4, 2021

Data Brokers: How They Put Your Privacy at Risk

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Hundreds of businesses around the world rely on consumer data for decision-making. Customer demographics and psychographics can help with the development of pricing strategies, marketing campaigns, and product development. However, collecting all of that information can be time-consuming and expensive, and may even require specialized skills. Instead of gathering it themselves, many businesses instead buy data from data brokers. 

A data broker is a company that specializes in collecting consumer information. Once they have it, they can build detailed profiles about your life, and then sell those profiles to any third party that wants it. Here’s what you should know about data brokers and how they put your privacy at risk:

  • How do brokers collect your data?
  • Is data collection legal?
  • What kinds of brokers are there?
  • Can you protect yourself from data brokers?

How Do Brokers Collect Your Data?

In the online world, there’s no such thing as complete privacy. Even the most careful user gives away data at some point or another, and most of us aren’t that careful. This makes it easy for data brokers to collect a ton of information about you. They can start by scraping public sources. Things like your location check-ins on Facebook, your social media statuses and page likes, your account profiles and more provide valuable data about your personality and interests. 

When they have gaps to fill, data brokers can also pay corporations for more data. This can include credit card purchase data, search engine history, device use, and more. With your data being collected through your phone, laptop, tablet, wearable gadgets and smart home devices, there’s no lack of channels for data brokers to use for detailed profile building.

Is Data Collection Legal?

Unfortunately, the answer to this question is somewhat hazy. Generally speaking, when you sign up for any new service, you have to accept their terms and conditions, which gives them the right to collect and use your data. However, the laws surrounding how these companies can use your data differ depending on the country you’re in. 

For example, many European nations are protected by the GDPR (General Data Protection Regulation) which forces companies to require user consent for the use of private data, and allows users to withdraw consent at any time. In California, laws give users the right to know what data is collected and how it’s used, the right to have that data deleted, and the right to forbid companies from selling their data. 

Unfortunately, the laws surrounding data protection often aren’t enough to truly protect a user. Even if companies must require consent for data collection and use through their terms and conditions, they can always deny service to customers who don’t accept those terms. 

Essentially, data collection lives within a grey area of the law, and is expected to do so for years to come.

What Kinds of Data Brokers are There?

Different companies may specialize in different types of data. However, they can generally be condensed into three categories:

  • Marketing: This type of data broker specializes in collecting consumer data that companies can use to improve their marketing efforts. They gather information about your likes, dislikes, personality traits, income level and more, all of which helps businesses target you with ads tailored to your interests and needs.
  • Risk Mitigation: Ever wonder how your insurance company found out you got a speeding ticket and bumped up your monthly rate? You probably didn’t call them for the purpose of confessing your crimes. Nor do they make freedom-of-information requests for the records of every single one of their clients. Instead, they use data brokers to collect information about you and the habits that may make you a risk to them. In this case, brokers may gather information about past tickets or other driving infractions, accidents, and even details about your personality that may deem you a “risky” client.
  • Fraud Detection: Financial institutions may also purchase data from data brokers. This data may include information about your income, purchase history, taxes, loans, and more, and can help banks make financial decisions regarding you.

Can You Protect Yourself from Data Brokers?

If you’re an internet user, there’s no way to 100 percent protect yourself from data brokers. Simply existing online generates data about you. Once created, brokers can collect it. However, you can mitigate the invasion of privacy caused by data brokers by reducing the amount of personally identifying information you put out there. A few methods you can employ include:

  • Reducing your social media use. Social media is one of the best places for data brokers to collect your information because we tend to indiscriminately share information about us. By reducing your social media usage, or at least the amount of information you post, you can reduce the effectiveness of data brokers.
  • Using a VPN. VPNs change your IP address and anonymize some of your activity online. While the websites you visit can still see what you’re looking at, they won’t know who you are or where you’re browsing from, and data brokers won’t be able to collect that information either.
  • Try a private search engine. Most of the top search engines in the world (like Google) collect your information, then share it with third parties. Rather than passively accepting the collection of your data, use a private search engine. They collect nothing about you (and thus have nothing to share with others).
  • Check your apps. Some apps and websites give you control over how much data they can collect and share. By modifying these settings to reduce their data abilities, you can regain some control over your information.

Conclusion

It’s no surprise that companies gather and use our data. But many internet users have no idea that entire businesses exist with the sole purpose of collecting and selling your information to anyone who wants to pay for it. Lax or non-existent data privacy laws barely touch this practice, allowing it to operate successfully all over the world. 

Although there’s no way to keep your data completely private, knowing how data brokers work can help you reduce the threat they pose. So can HotBot VPN.

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