PANOPTICON information broker
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Clients of information brokers come from a wide range of industries and professions, including manufacturing, financial institutions, political parties, government agencies and historians. Non-profit organizations might benefit from information which helps them to apply for grant funding, and real estate agents often use IBs to undertake land title searches. Advertising, fraud detection and risk mitigation are three common reasons for using data brokers, and these are the three broad categories defined by the Federal Trade Commission. Information brokers need to screen their clients carefully to avoid criminals obtaining data on individuals for nefarious purposes: US broking companies Lexis-Nexis and ChoicePoint have both been duped by phoney clients, leading in one case to identity theft on a large scale.
Data may be harvested from various sources, including census, change of address, motor vehicle-related records, user-contributed material and social networking sites, media and court reports, voter registration lists, consumer purchase histories, most-wanted lists and terrorist watch lists, bank card transaction records, health care authorities, and Web browsing histories. IBs may also purchase information from other companies (such as a credit card company). The information collected may include name, address, social security number, driver's licence number and other such identifying information, as well as occupation, property ownership, income, etc. Advertising companies are most often only interested in profiles and categories rather than personal information about an individual.
Information from property records, tax filings, etc. may also be available via "people-search" whitepage sites, either for a small fee or no cost. These websites can thereby have implications for stalking, harassment, and domestic violence.
The data are aggregated to create individual profiles, often made up of thousands of pieces of information, such as a person's age, race, gender, height, weight, marital status, religious affiliation, political affiliation, occupation, household income, net worth, home ownership status, investment habits, product preferences and health-related interests. Brokers then sell the profiles to other organizations that use them mainly to target advertising and marketing towards specific groups, or to verify a person's identity including for purposes of fraud detection, and to sell to individuals and organizations so they can research people for various reasons. Some datasets may also include geolocation data and is included in marketing resources from Acxiom. Experian and Oracle also advertise location-based marketing services.
Many brokers work independently, while others are employees of large companies such as LexisNexis or ProQuest.
=== In the United States ===
Data brokers in the United States include Acxiom, Experian, Epsilon, CoreLogic, Datalogix, Intelius, PeekYou, Exactis, and Recorded Future. In 2012, Acxiom claimed to have files on about 500 million active consumers worldwide, with about 1,500 data points per person and, in 2023, Acxiom (renamed LiveRamp) claims to have files on 2.5 billion people and over 3,000 data points per person. The company Oracle has publicly noted it has connections with 80 data broker companies. The US Department of Homeland Security has purchased cell phone location data and home utility data from data brokers to facilitate deportations. The Federal Bureau of Investigation (FBI) has purchased personal data from the company Venntel. Under both of these circumstances, a warrant is not required to acquire this data, due to the fact that it is "open source" or "commercially obtained". Use of the data also has implications in background checks (used in rent/housing and job applications).
In 2012, Spokeo, a people search website, settled with the US Federal Trade Commission for $800,000 over violations of the Fair Credit Reporting Act.
In 2017, Cambridge Analytica claimed that it has psychological profiles of 220 million United States citizens, based on 5,000 separate data sets, with another source reporting 230 million. A scandal emerged after it was found that after 270,000 Facebook users consented to sharing their data, data was scraped from about 50 million profiles on the social media platform. This was seen as breach of trust by Facebook.
In 2018, American companies spent $19 billion acquiring and analyzing consumer data, according to the Interactive Advertising Bureau.
In 2021, The Pillar outed a Catholic priest by purchasing data from a data broker including data usage from Grindr.
== Privacy issues and regulation ==
Information privacy laws are not as strict in the United States as in the European Union, where data brokers work hard to get around the General Data Protection Regulation (GDPR) regulations, brought into operation in 2018. Under GDPR, data can only be collected for re-use on one of six legal bases. The rather vague term "legitimate interest" is often abused or misinterpreted. Explicit consent from users is required for information storage. In addition, data processing related with political opinion and religious belief is prohibited unless the consent of data subject is granted.