Advantages of Data Brokering | disadvantages of Data Brokering
This page covers advantages and disadvantages of Data Brokering performed by data brokers. It mentions Data Brokering advantages or benefits and Data Brokering disadvantages or drawbacks. It also mentions characteristics of data broker industry.
What is Data Brokering?
Introduction:
The data brokering is a process by which personal informations of the people are collected and sold to
other organizations without the knowledge of the people.
The person or group of people doing the job of data brokering are known as data broker
or information broker. The personal information contains name, age, race, gender,
height, weight, marital status (married/Unmarried), religious and prefessional associations,
qualification, occupation, income, own house/rented house, investment details,
hobby, health and other interests etc. The data brokers create profiles of the people using algorithms or softwares.

Following are the sources from where data collection tasks are carried out by data broker.
• Public records
• Private sources such as census data,
change of address database, motor vehicle registration records,
social networking sites (e.g. facebook, twitter, linkedin, Youtube, Google+ etc.)
• Media/Court reports
• Voter list
• Online purchase history at websites
• Transaction records with the banks
• Cellular companies such as Vodafone, Verizon wireless, AT&T, T-Mobile etc.
• Health care companies and hospitals
• Web browsing histories on major search engines such as Google, Yahoo, Bing etc.
The personal data collected by the data brokers are sold to following organizations.
• Advertising and marketing agencies
• Banks (Helps to issue loans or credit cards based on person's loyalty)
• Research organizations who are carrying out study on individuals
• Government agencies such as FBI, CIA etc.
• Law enforcement agencies such as ATF, DEA etc.
Following are the characteristics of data broker industry.
➨Data brokers collect consumer data from various sources without consumers' knowledge.
➨Data broker industry is complex with multiple layers of data brokers providing
data to each other.
➨Data brokers collect and store billions of data elements covering nearly every consumer.
➨Data brokers combine and analyze data about consumers to make inferences about them, including
potentially sensitive inferences.
➨Data brokers combine online and offline data to market to consumers online.
Benefits or advantages of Data Brokering
The consumers benefit from many of the purposes for which data brokers collect and use data.
Based on this, following benefits or advantages of Data Brokering can be derived.
➨The data brokering products help to prevent fraud,
to improve product offerings and to deliver most relevant advertisements to the consumers.
➨Risk mitigation products provide major benefits to consumers by preventing
fraudsters from impersonating unsuspecting consumers.
➨Marketing products benefit consumers by allowing them to easily find goods and services they
prefer at affordable cost.
➨Consumers benefit from increased and innovative product offering from many
competitive companies including small businesses.
➨People search products allow individuals to connect with old friends, classmates, neighbors etc.
Drawbacks or disadvantages of Data Brokering
Many of the purposes for which data brokers collect and use data pose risks to consumers.
Based on this, following drawbacks or disadvantages of Data Brokering can be derived.
➨Consumers will be deprived of immediate benefit due to error in risk mitigation product.
Moreover consumers can not do anything to prevent recurring of the problem/issue.
➨Scoring processes in some of the marketing products are not visible to consumers.
Hence consumers can not do anything to mitigate negative effects of low scores e.g.
limited advertisements, different levels of service from companies etc.
➨Some of the marketing products send advertisemenrs related to health, financial products etc. Consumers
find it troublesome and will lose trust in the marketplace.
➨People search products are used by individuals to retaliate and cause harm.
These products may expose domestic violence victims, prosecutors, law enforcement officers etc.
➨Storing data about consumers indefinitely may create security risks as
consumers' habits over time are being utilized by identity thieves to predict their passwords and
other authentication credentials etc.
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