The Unseen Forces Shaping Your Financial Life
Data brokers, often also referred to as data aggregators or information brokers, are businesses that compile and analyze data on consumers for the purpose of selling it to other different organizations. Those latter organizations make informed decisions about any person, often unbeknownst to the party in concern. Because of the great influences of data brokerages on our lives, it is essential to understand how they work and the ways in which their actions are affecting us.
The most influential way data brokers enter into our lives is through credit scores. Credit scores are three-digit figures that encapsulate a lot of information about a person's creditworthiness. Indeed, they play the most important role in deciding loan approvals, interest rates, and credit limits. Data brokers combine information from a host of sources, including credit card companies, banks, and public records, to come up with exhaustive credit reports on borrowers. These reports calculate credit scores, which have a huge impact on our financial lives.
Interest rates surge with a low credit score, interest rates surge, and insurance premiums are higher than usual. It can even create problems when getting hired by an organization or finding a good apartment for rent. A person with a high credit score can enjoy benefits in the form of low interest rates, better loan options, and other such benefits from lenders. The real problem is that much of the information used by these data brokers to calculate credit scores needs to be completed and accurate, thus leading to less-than-accurate credit scores. Devastatingly, this could all be news to the person whose credit reports contain those errors.
Brokers sell these reports to lenders, landlords, and employers, who make decisions about our financial lives. In effect, that means that our credit scores can determine whether we are going to get a job, be able to rent an apartment, or even have a cell phone contract. There needs to be more transparency and accountability, which plague credit reporting firms, making it very hard to correct mistakes or contest information for accuracy.
The Job Application Process: Where Data Brokers Hold Sway
The influence of data brokers is immense in the processing of job applications, too. There are many employers, especially large organizations, looking to have data brokers implement background checks on prospective employees. This would include a criminal record, credit report, and sometimes even social media activity. All the information retrieved from these sources is put together to judge the character, reliability, and trust levels of the applicant, rendering a strong impact on one's chances of getting hired.
The concern here is that data brokers mostly gather the information that needs to be completed, accurate, or both, which can lead to mistaken inferences about the character of a person. To give an example, a criminal background check may include information that has nothing to do with the potential job for which one is applying, or it may simply be inaccurate. It could mean that prospective employees who happen to have errors in their background checks will be turned down for employment, even if they are otherwise qualified.
Moreover, brokers may source data from social media to deduce a person's personality, behaviors, or way of life. It has resulted in discrimination, especially against minority groups or those living non-traditional lifestyles. Lack of transparency and accountability within the background check industry makes it hard to correct errors or dispute inaccurate information.
The Dark Side of Data Brokering: Surveillance and Discrimination
Data broker activities range from innocuous to the more sinister, meaning surveillance and discrimination. Essentially, these brokers bring together data from various sources, such as social media, online activities, and even public records. Individual profiles created from that information can be useful in targeting advertisements, offers, or services to that individual, something that can be intrusive and invasive.
Moreover, data brokers can further sell these profiles to entities that utilize them to discriminate against certain sets of people. An example is where an insurance firm may use the data broker's profile data to deny insurance coverage to persons with certain medical conditions or leading lifestyles unfavorable to the insurance firm. This can lead to serious harm and discrimination among vulnerable populations.
In the absence of proper regulation and transparency, it is truly hard to hold these companies responsible for their activities. Brokers operate in the dark: data collection and sale to companies go on without any knowledge on the part of persons. This kind of action may easily result in the loss of privacy, autonomy, and dignity, whereby persons who are reduced to simple data points in some huge digital landscape do not have their interests protected.
Retaking Control: Safe Guarding Your Information
What would you do to begin safeguarding your information as far as data brokers are concerned? Consider the following couple of tips:
- Periodically check your credit reports for errors or inaccuracies in them.
- Opt out from data brokers out of such services as data brokers, including people search sites and credit reporting agencies.
- Make use of tools that enhance privacy—like VPN and ad blockers—to help tighten up data collection.
Be careful with personal information online, create strong passwords, enable two-factor authentication, and work together in the community for stronger laws and regulations (like the EU's GDPR). Join forces in calling for stronger oversight mechanisms that curb the misuse of your data.
Do all this, and you can reduce the impact that data brokers have on your life and prevent your personal information from working against you. Your data belongs to you; it's time to take back control.
