Data Brokers: What Do They Know About You?

Category: Privacy

The Internet has made it easy for you and me to collect enormous amounts of information about nearly any subject; that is indisputably a good thing. However, when it comes to the multi-billion-dollar business of collecting and selling data about other people, that use of the Internet can take a sinister turn. Read on for the scoop on “data brokers" and how they operate…

What is a Data Broker?

The Federal Trade Commission defines “data brokers” to include “companies that collect information, including personal information about consumers, from a wide variety of sources for the purpose of reselling such information to their customers for various purposes, including verifying an individual’s identity, differentiating records, marketing products, and preventing financial fraud.” There’s quite a mix of beneficial and intrusive applications in that definition.

For example, your credit report (if it’s good) can be an asset to you when you want to buy anything and pay for it later: a house or car, a smartphone, even an insurance policy. But should your credit rating be used to rate your risk of getting sick? Insurers increasingly think it should, presumably because they have found a correlation between low credit scores and high health care insurance claims.

Beyond the familiar and fairly easy to understand credit report (you either pay your bills on time or you don’t) are many other consumer activities that data brokers compile in individual dossiers. And it's been happening long before the Internet made it easier.

Data Brokers

The things you buy, as documented by warranty cards, itemized grocery store receipts, and other telltales, go into your dossier. Things you do, such as exercise, take cruises, or rack up parking tickets, are tabulated. Then things get really creepy, as in “Minority Report” creepy.

What you think and feel are also estimated in the dossiers maintained by data brokers. What kinds of food you like; your favorite color; your religious persuasion; your political leanings; your positions on specific issues ranging from environmental conservation to abortion -- all of these thoughts and emotional reactions are presumed to be evident in your behaviors, and added to your dossier.

Buy, Sell, and Trade

I am using the word “dossier” repeatedly knowing full well that it carriers sinister connotations of invisible, anonymous, practically omniscient beings who are spying on you -- because that is what’s happening. You don’t have just one dossier but dozens, perhaps hundreds. No one knows exactly how many firms are engaged in the data brokerage industry.

But we do know they buy, sell, and trade these personal dossiers as if each was a baseball card. One data broker’s dossier on you combined with another data broker’s dossier on you yields an even more complete and commercially valuable dossier. There’s no telling who has the most complete dossier, or how many copies of it are in whose hands.

The government buys dossiers from data brokers. One example is the “Work Numbers” database, a product of credit reporting agency Equifax. It contains current, active employment and salary records on 54 million Americans, and another 175 million historical records. The federal government began buying Work Numbers in 2013 to help verify the eligibility of applicants for benefits such as food stamps or Medicaid. That may seem like a perfectly good reason for government to buy personal data from private data brokers, but it opens the door to alarming abuses.

There's Always a Loophole

Do you know what's in your credit report? Do you know the difference between a credit report and a credit score? See my articles Get Your Free Credit Report Online and How to Get Your Free Credit Score.

And if you are concerned about your privacy, I recommend that you read these related articles: The Noose Around Privacy is Tightening..., Google Wants To Track You More, But It’s Optional, Who's Watching When You Surf the Web?, Tweak Your Microsoft and Google Privacy Settings, and Microsoft Responds to Windows 10 Privacy Concerns

The government is restricted by law from collecting certain data on its citizens. But data brokers are not restricted in any way. If government can buy what it cannot legally obtain through its own efforts, laws restricting domestic government spying become toothless.

Former Senator Jay Rockefeller (D-WV) ordered a staff study of the data brokerage industry when he was Chairman of the Committee on Commerce, Science, and Transportation. The 42-page report, completed in December, 2013, https://goo.gl/3mkJBP (PDF) excoriated the data brokerage industry for its lack of transparency and its frequent disregard for the few laws that govern it. For instance:

“In June 2011, Teletrack, Inc. paid a $1.8 million penalty to settle FTC charges that it sold lists of consumers who had previously applied for non-traditional credit products, including payday loans, to third parties – primarily pay day lenders and sub-prime auto lenders – that wanted to use the information to target potential customers. The FTC alleged that the information Teletrack sold constituted consumer (credit) reports and could not be sold for marketing.”

There are currently no federal laws regulating the collection and distribution of personal consumer data unless the data is used to evaluate creditworthiness; then the Fair Credit Reporting Act applies. But otherwise, you have no legal right to know what data brokers know about you; no recourse in the event data brokers maintain inaccurate data about you; no right to know who your data is shared with or sold to.

Most data brokers are not Credit Reporting Agencies subject to the FCRA. They’re free to do whatever they want with your data, even make up assumptions about you, and distribute your dossier to anyone they please.

Since Rockefeller retired from the Senate in 2015, no dully (sic) elected official has taken up the cause of reining in data brokers. As the 2016 elections approach, you may want to ask your senator, congresscritter, and the other candidates who want your vote where they stand on this issue. You’ll probably hear, “I’ll have to get back to you on that.” Follow up, and don’t let candidates weasel out of answering.

Your thoughts on this topic are welcome. Post your comment or question below...

 
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This article was posted by on 11 Jul 2016


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Most recent comments on "Data Brokers: What Do They Know About You?"

(See all 23 comments for this article.)

Posted by:

Nezzar
12 Jul 2016

Bob has given us valuable info on how we are being spied upon, and you guys are only worried about a grammar mistake. Thanks for the info, Bob!!


Posted by:

James Kussy
12 Jul 2016

Bob, Your observations on Data Brokers today is in my opinion the most needed and valuable of any of the very excellent statements you have ever put out. I don't know of anyone who has come to grips with this horrendousproblem at all. I am profoundly grateful. Jim Kuaay


Posted by:

David
12 Jul 2016

Wow, three identical rants, er, comments. Must be a slow day where you are.

Just to be fair, "such hideous error" contains an error, which I'll let you find. Hint: all that's needed is the addition of one letter. Also, "is is" is repetitive. I guess arrogance is a common failing.


Posted by:

David
12 Jul 2016

I guess two of your comments have been removed.

I did miss one more error, though. Is the opening supposed to be "Come on, Bob" or "Common Bob"?


Posted by:

RandiO
12 Jul 2016

As always, thank you for this concise packet of worthwhile information.
I had learnt that American English is a ‘dynamic’ language, also governed by usage. As opposed to 'static' languages like Latin and maybe even French.
As such, I urge you to continue using "you and me" so that peeps would have no need to come out of woodwork for such petty nits and with the hopes that it becomes accepted usage, both literally and figuratively!
Would there be anyone else who would like to join this mission with "Bob and me"?


Posted by:

ken
12 Jul 2016

I find the collection of personal data and the potential for misuse troubling, but I was born in the 1950s. Many young people, who have grown up with social networks where they freely share their personal data, might not consider this a big problem.


Posted by:

Jim
12 Jul 2016

Months before I turned 65 I started getting letters about this or that Medicare policy; brokers even showed up at my door. Now my wife is getting the same treatment. I suspect the ransomware writers could make a lot more money if they could write something that would delete us from the data brokers databases (for a price).


Posted by:

Liz
12 Jul 2016

Thank you for this info on a really important topic, Bob.


Posted by:

barry
12 Jul 2016

Then you have the wale shark of data collections. Fusion Centers. These state, local and regional institutions were originally created to improve the sharing of anti-terrorism intelligence among different state, local and federal law enforcement agencies. The scope of their mission has expanded - with the support and encouragement of the federal government of course- to cover "all crimes and all hazards." The types of information they seek for analysis includes not just criminal intelligence, but public and private sector data. These fusion centers raise major privacy issues.

Then you have Judicial Watch who obtained records from the Consumer Financial Protection Bureau (CFPB) revealing that the agency has spent millions of dollars for the warrantless collection and analysis of Americans’ financial transactions. The documents also reveal that CFPB contractors may be required to share the information with “additional government entities.”
Some of the documents include
Overlapping contracts with multiple credit reporting agencies and accounting firms to gather, store, and share credit card data as shown in the task list of a contract with Argus Information & Advisory Services LLC worth $2.9 million
· An “indefinite delivery, indefinite quantity” contract with Experian worth up to $8,426,650 to track daily consumer habits of select individuals without their awareness or consent
· $4,951,333 for software and instruction paid to Deloitte Consulting LLP
· A provision stipulating that “The contractor recognizes that, in performing this requirement, the Contractor may obtain access to non-public, confidential information, Personally Identifiable Information (PII), or proprietary information.”
· A stipulation that “The Contractor may be required to share credit card data collected from the Banks with additional government entities as directed by the Contracting Officer’s Representative (COR).”

Then you have a totally manipulated and managed stock market and of course the global warming hoax, never let a good cycle go to waste, and then there is the tic tac toe we see in the sky above us! I think this is all part of the “ New Normal”?! Sorry I digressed :)


Posted by:

Paul
12 Jul 2016

@casey I bet you're really fun at parties - NOT!


Posted by:

Gloria Huffman
12 Jul 2016

"For you and ME" is grammatically correct, because "me" is the object of "for" (think "for me," not "for I," which is incorrect). "For me to collect," not "for I to collect." Therefore, "For you and me to collect."

"Me/I" is not the subject of the verb infinitive "to collect" ("me/I to collect info"). "I" is subject, "me" is object. "You" is the same as a subject or object, so there's not a problem with it ("you collect," "for you").

In fact, the phrase beginning "to collect" is like a noun which is the object of the verb "has made," and explains the word "it."

English uses the word "it" so that an entire idea can be expressed quickly ("made IT easy for us")without getting bogged down in a very long string of words up front. When reworded with "to collect [phrase]" instead of "it," the infinitive "to collect" would be changed to the gerund (noun) "collecting."

"The Internet has made 'to collect ... information ...' easy for you and me" becomes "The Internet has made 'COLLECTING ... information ...' easy for you and me."

Thanks for indulging my urge to grapple with the grammar!


Posted by:

Linda
12 Jul 2016

Now THAT is really scary. George Orwell just turned over in his grave.

Thanks for that information, Bob. And BTW, your grammar police groupies are pretty scary too!


Posted by:

Jay R
12 Jul 2016

You and I are not the only ones to want you and me to feel Grammer is important. Down Periscope! Let us shoot from the hip and rejoice in our humanness.


Posted by:

Kacmor
13 Jul 2016

Hi Bob and other readers,
Yes, the wrong use of "you and I" is something to be noticed and eliminated, because it contaminates the language we all use, and should try to respect. In this case, however, the attention given this mistake took away from the very topic of the blog.
I hear people often say that they don't care about snooping of any kind, because they don't have anything to hide. I have nothing to hide myself, but I resent becoming an article for sale. What I buy in the store, how I entertain myself and what doctor heals my ails and with what, should be my business and nobody else's.
The elected by me officials should protect my interests, not the powers' that be. My right to privacy is more important than how easy it is to the government to do its job. And in this case it is not even the government who is the main client of the information gatherer. The government just allows this gathering for its further use. It is a crime. I have a right to be left alone and not to be preyed upon. More so, because I have nothing to hide.
Thank you for the article.
It is good to know.


Posted by:

JD
13 Jul 2016

Bob, I have been reading your columns since the tour buss days and I have always found them to be informative. Quite often I learn as much or more from the thoughtful comments of your readers as I do from your column.
Today's column was a major exception. While proper grammar and spelling is important, it should not become the main topic of the comments.
I sincerely hope that you simply delete comments that provide no useful information so as to prevent your comment pages from deteriorating to the level that you can find in the comment section of any newspaper.
If you do not agree feel free to delete this comment.
JD


Posted by:

MD
14 Jul 2016

Thanks for the good info, Bob. I'm sure this situation with these types of businesses is just the tip of the ice burg. These people are parasites, who've been blinded by the huge profits that are generated by their invasion of our privacy & the subsiquent misuse. If everyone thinks this is bad now, just wait, it gets worse. And it will continue to go in that direction unless we do something about it now.
I've felt for many years that even many of the handy little apps we use routinely are probably designed specifically to be sneaky, backdoor, data miners. Isn't that the real definition of a Trojan horse?
Can't wait to see what little "surprises" Pokemon Go has in store.


Posted by:

MD
14 Jul 2016

I'd like to add that I agree with much of the info written by "barry" above. Including his remark about "the tic ac toe we see in our sky above us!" I'm sure he is referring to the "chemtrails' left by jets spraying our skies. This is deadly serious and needs our immediate attention. The real term for it is "geoengineering". See geoengineerinwatch.org for the frightening story. Sorry to get a bit off-topic.


Posted by:

Bob S
15 Jul 2016

I TOTALLY agree with you, JD!


Posted by:

Old Man
15 Jul 2016

This has been going on for decades before Al Gore invented the Internet. The Internet just makes the amount and type of data gathered easier and faster.

Bob’s article brings all this clandestine data gathering to our attention. However, other than insurance companies, he does not say much about its misuse. Then he directs our attention to one potential user.

The comments about possible grammar errors only re-enforces what I’ve been saying since before Snowden. People don’t care who (Microsoft excepted) has what information about them; be it spammers, ad agencies, scam artists, blackmailers, or some other nefarious group.

But Heaven forbid that a government agency should get hold of a shred of it! – even if comes from someone else’s database.

Re: MD@14Jul2016
You are correct. This is only the tip of the iceberg. Add in all the surveillance devices, the IoT, add-ons to programs we use, etc., we have very little privacy left. And, all this information is available to the Data Brokers to sell to whomever is willing to pay.



Posted by:

Dean
16 Jul 2016

It's been almost a decade since I became aware of the fact that the USPS (an arm of the government) sells my information to 3rd parties. Bob, I'd like to hear more about how that works and why I can't stop getting so much junk as a result.

I bought a house last year and I still get letters most every day from myriad wannabe lenders containing my full name, address, and loan number (sometimes actually correct). I shred my junk mail now.

I guess the USPS is the original data broker in America. Let's band together and destroy our mailboxes. Damn the identity thieves!

EDITOR'S NOTE: From a Forbes article on this topic: "Even if you do not file a change of address with the post office, data brokers often learn that you have moved when you update your magazine subscriptions, deed registrations, phone connections, credit card details or have transitions with other companies. Then they include you into a list of ‘new movers.’ "

See http://www.forbes.com/sites/adamtanner/2013/07/08/how-the-post-office-sells-your-new-address-with-anyone-who-pays-and-the-little-known-loophole-to-opt-out


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