Are you familiar with the concept of data brokerage? This industry has been around in some guise for decades, though the digital revolution has seen it grow arms and legs in recent years. With more and more of us conducting our social interactions and financial transactions online, there is a wealth of information about us available in cyberspace.
Data brokers mine this information and, alongside that which they can glean from public records and our purchase histories, create a detailed picture of who we are, where we live and what interests us. This is then sold to the highest bidder, which can be retail companies, financial institutions or, worse, unscrupulous cyber criminals looking to make a quick buck. But how does this affect your bank balance in reality? We take a look at the major ways below.
Targeted marketing campaigns
One of the most common ways that data brokers make money is through selling your private information to companies that sell goods and services. By identifying those most likely to need their products, they can create more targeted (and thus more effective) marketing campaigns. In theory, this might not sound like the worst thing in the world; all of us see umpteen ads a day anyway, so they may as well be more relevant to us.
The troublesome aspect of this arises when data brokers concentrate on those who are financially vulnerable, with a view to selling their information to personal loan providers with high interest rates or other risky products. One recent report from the US Senate unearthed marketing lists with names such as “Ethnic Second-City Strugglers” and “Tough Start: Young Single Parents”.
Credit history
As mentioned above, your online and offline activity paints a lurid picture of your financial situation. While this might be leveraged to target the most vulnerable people in society with certain shady offers and products, it can also debar them from other, more legitimate goods and services.
For example, data brokers can reveal details about your financial struggles that you’d prefer remained private. This could affect your ability to access credit, obtain insurance or even open a bank account in the first place. As such, the reams of personal information about us on the internet can have an outsized effect on our lives offline, too.
Cyber crime
The two previous consequences of data brokerage might be ethically dubious, but they are both firmly within the confines of the law. However, there are many individuals who are not so scrupulous in their behavior and who will purchase your personal data with more nefarious purposes in mind.
Since data brokers often sell to the highest bidder without conducting due diligence on their intentions, cyber criminals can access your sensitive information with a view to stealing your financial assets, committing identity fraud or blackmailing you. This applies to individuals as well as companies, which is why it’s so important for every internet user to tread carefully when surfing the web.
To combat data brokers on a personal level, you may wish to consult these opt-out guides to manually request the removal of your data.
