• The personal data that companies collect from consumers online has become a big business referred to as data brokerage.
• However, most consumers don't know what personal information about them is being collected, how it is being traded, or how they can protect themselves.
• Online data privacy and security experts say there are several steps people can take to protect sensitive data.

Data brokers have long operated in the shadows of the internet, quietly amassing unprecedented amounts of personal information on billions of people across the globe, but few realize just how deep this data collection really goes.

In an age where every move you make online — every click, every purchase, every "like" — is meticulously harvested, packaged, and sold for profit, aggregated personal data has become a valuable commodity, and the global data broker industry is proof of that.

The rise of artificial intelligence tools poses the risk of even more personal information being scraped from the internet and an already opaque world of data brokering becoming even more aggressive, and that is heightening data privacy concerns. A 2023 study from Pew Research found that the American public increasingly says it does not understand what companies do with their data. According to Pew, 67% of Americans say they "understand little to nothing about what companies are doing with their personal data, up from 59% in its previous survey on the subject in 2019. A majority of Americans (73%) think they have "little to no control" over what companies do with their data.

Many people are unaware that something as simple as their phone number can be used by data brokers and bad actors to uncover highly sensitive information, including a Social Security number, address, email, and even family details, said Arjun Bhatnagar, co-founder and CEO of Cloaked, an app that disguises your personal information by generating a unique "identity" for each online account you have.

According to Roger Grimes, an expert at cybersecurity education firm KnowBe4, while many data brokers —especially the more well-known players — sell information responsibly, some of the smaller, unknown brokerages skirt regulations, push ethical boundaries, and exploit data in ways that can lead to misuse or harm. This is partly due to the hazy regulation landscape around data brokerage, which makes it easier for these practices to go unchecked.

Some of the largest providers of data brokerage services include Experian, Equifax, TransUnion, LexisNexis, Epsilon (formerly Acxiom), and CoreLogic, according to a ranking from OneRep, an online personal data management service. People-search services Spokeo and Intelius are also among the top data brokers, according to OneRep. These companies operate across multiple industries, handling both publicly available information and more sensitive consumer data. They offer various services, ranging from marketing analytics to credit scoring and background checks, and all of them have processes for requesting your data or asking for it to be deleted. However, depending on the state you live in, they may not have to comply.

Experian, Equifax and TransUnion are a good place to begin to understand how much the data industry has grown. While many consumers know these companies for their credit services, those are now just one piece of the revenue pie, with broader digital marketing of data increasingly important, according to Jeff Chester, founder and executive director of the Center for Digital Democracy, a Washington, D.C.,-based consumer privacy advocate. And data collection spans much farther across the economy, with companies from grocery stores offering discount programs to streaming video services amassing data that others will pay for. "Today, everyone is a data broker. Having the ability to reach someone online and target has become a core part of business," Chester said.

"I try to lock down everything as much as I can, but I'm also aware that even though I'm a security expert, I'm probably overexposed," said Bruno Kurtic, president and CEO of data security firm Bedrock Security.

As a basic step to limit financial risks, he recommends that all individuals freeze their credit reports as a proactive measure against identity theft and to prevent malicious actors from opening new accounts or loans in their name.

Inside data brokers' massive vault

Cybersecurity experts estimate that data brokers collect an average of 1,000 data points on each individual with an online presence.

"It behooves them to collect as much as humanly possible about you, because the larger the information pool about you and the more specific they can get, the higher the cost of that data," said Chris Henderson, senior director of threat operations at Huntress, a cybersecurity company founded by former National Security Agency personnel.

Here's a breakdown of the types of information data brokers typically collect, according to privacy experts interviewed by CNBC:

• Basic identifiers. Full name, address, phone number, and email.
• Financial data. Credit scores and payment history.
• Purchase history. What you search for online, what you buy, where you buy it, and how often you buy certain products.
• Health data. Your medications, medical conditions, and your interactions with health-related apps or websites.
• Behavioral data. Insights into your likes, dislikes, and the types of ads you're likely to click on.
• Real-time location data. GPS data from apps that track your commute, where you shop, and how often you visit certain places.
• Inferred characteristics. Based on you're your browsing and media consumption — the websites you visit, articles you read, videos you watch, data brokers draw insights about your lifestyle, income, preferences, religious or political beliefs, hobbies, and even your likelihood of charitable giving.
• Relationships with family, friends, and colleagues. By analyzing your network of friends, followers, and connections on social media and messaging apps, data brokers can map out your relationships and even track how frequently you interact with certain individuals to determine the depth of your bonds.

Little oversight around data privacy

The lack of comprehensive regulation around data privacy allows data brokers to operate with little oversight, unlike the General Data Protection Regulation (GDPR) in the European Union.

"There is no comprehensive federal privacy law that specifically regulates the industry, which makes it hard to combat them," said Chelsea Magnant, adjunct instructor of cyber leadership at NYU's Center for Global Affairs and a director at corporate consulting firm Brunswick. "We essentially have a patchwork of state laws with varying privacy protections that these companies know how to navigate."

California was the first to enact comprehensive legislation in 2018 with the California Consumer Privacy Act, giving residents more control over their personal data. In 2020, California voters approved an expansion of the CCPA, called the California Privacy Rights Act, which took effect in 2023. It offers the most extensive protections in the U.S., including data correction, limiting the use of sensitive information, and requiring businesses to honor opt-out preference signals. It also imposes stricter data-protection obligations on companies, such as minimizing data collection.

Since then, about 20 other U.S. states have followed suit; however, the specific rights and thresholds for which companies must comply vary widely between states.

"Different states have different business environments, economies, and viewpoints. This lack of a unified approach, something that protects all citizens across the country, leaves us vulnerable to data brokers," said Rob Hughes, chief information security officer at RSA.

Even in states where the privacy laws are strict, there is skepticism that smaller companies on the margins of the data brokerage industry will follow them. "They have extremely sensitive data sets under their management, and they have to essentially behave like the most sensitive enterprises. And we know that some of these data brokers just don't operate businesses like that," Kurtic said.

How to take control of your data

To start protecting your privacy, it's important to rethink how much personal information is shared on a daily basis, says Cloaked's Bhatnagar. While we can't fully hide, consumers need to develop new habits and tools to limit what we expose, from turning off permissions that track your location to saying no to cookies and refraining from posting personal details online. Additionally, using tools like secure browsers, VPNs, and tracker blockers can help.

Some of the largest technology companies in our daily lives, such as Apple, are continually updating and adding to privacy options, such as on the new iPhone and latest iOS update.

An Equifax spokeswoman said U.S. consumers can opt out of their personal information being shared in accordance with U.S. state privacy laws. On average, she said, opt-out requests made through the Equifax Privacy Preference Center are processed in less than one business day and consumers are informed of a successful submission through the company's Preference Center. Consumers can also review the types of third-parties that companies such as Equifax share personal data within its privacy section.

Opt-out links and instructions are readily available for most of the major data brokers:

• Experian
• TransUnion
• LexisNexis
• Epsilon

But data privacy experts says reclaiming or deleting your data from brokers can be a deliberately complex process that is not only time-consuming but frustrating. Each broker has its own opt-out requirements, and even after you've removed your data, it often reappears, sourced from other places.

"Removing your data from their systems impacts their bottom line, so they are disincentivized to make this easy for you," said Henderson. "Ultimately, if you remove the information, they can't sell that. So the more people who request their information be removed, the less attractive of a broker they are to the advertisers."

There are data-removal services, such as DeleteMe, Kanary, OneRep, and PrivacyDuck, which charge a fee to manage these ongoing tasks, and are becoming increasingly popular. In October, Consumer Reports launched Permission Slip, a free app that helps you control which companies can collect, store and sell your personal data. It relies on donations to keep it going, either through the app or the Consumer Reports website.

For those opting for the DIY approach, here's what the data privacy experts interviewed by CNBC recommend to get started:

Identify the brokers collecting your data. As already stated, this can be a daunting task, as many operate behind the scenes. However, there are a few methods you can use to track them down, says Henderson. One is to conduct a Google search using your name, phone number, and email address and see which brokers pop up. You'll most likely find your name on sites like Spokeo, Whitepages, or MyLife. Another strategy is to visit the websites of the largest data brokers and search your information.

Submit opt-out requests. If you live in a state with data privacy regulations, you can submit a request to delete your data on the opt-out page of these companies' websites, including at the links listed above, so they cannot share your data with third-party companies. It's important to note that each broker may have different processes for handling these requests and state laws vary when it comes to what types of data are covered. Some data brokers may also require you to provide identification or verify your identity.

Check your results. After submitting opt-out requests, revisit the data brokers' sites periodically to ensure your data has been removed. It may take several weeks or months for your request to be processed.

Engage in digital hygiene practices. Regularly reviewing and updating your online security practices is essential. Secure passwords, two-factor authentication, and encryption tools can help protect your information. Using virtual identities, such as alternative email addresses and phone numbers, can further safeguard your personal information.

Seek legal recourse if necessary. If a data broker refuses to comply with a deletion request, you may be able to file a formal complaint with regulatory authorities such as the Federal Trade Commission, which has brought cases against the industry.

However, it's important to understand that not every state provides the same level of protection. Consult a privacy attorney if you believe your rights have been violated.

'The future is unfortunately dark'

Experts say deleting the data is an imperfect solution, "a Band-Aid to address a gaping wound," according to Chester.

"Consumers have been placed in a bad position," he said. "Data is now a form of payment," he added, referring to cases where the consumer wants a discount in the grocery store or pharmacy. "This is a comprehensive privacy problem which requires Congress or the FTC. The idea an individual can take care of their privacy ... you can shut down a tiny bit of it, but you would need to spend a great deal of time, and once you opt-in to get a discount at a store, it all starts over again."

The future of the data broker industry looks both promising and troubling as technological advancements continue. Javad Abed, assistant professor of information systems at Johns Hopkins Carey Business School, warns that data brokers will continue to evolve as AI and machine learning advance.

"With AI, data brokers will create even more detailed and predictive profiles, incorporating everything from biometric data to behavioral tracking," Abed said. "The problem will increase, and things are going to become more complicated."

Abed sees potential in blockchain and privacy-enhancing technologies, which could disrupt the data brokerage model by increasing transparency and giving individuals more control over their digital identities. However, he remains skeptical: "The future is unfortunately dark. It needs to be collaborative work. I don't see the motivation right now from the main actors for a collaborative change." 

"Telling our grandmothers or a child to configure settings on their social media and their browsers and search engines is not a winning proposition," Kurtic said. "It's going to take a combination of regulation, technology on the vendor side, and know-how on our own personal side."

Until regulation steps in, data brokers will continue to collect as much data as possible. "These are revenue streams for companies that might not have other recurring revenue streams," Henderson said. "And given there's no regulation stopping businesses from selling information about you, I don't see the practice stopping, especially given how lucrative it is."