Have you seen an ad for something on social media after talking about that exact product with a friend? It’s no mistake. An ad was placed in front of you because you’ve already searched for it or similar items. All of your moves online give companies free insights into your personal life every day, revealing that you're a pet parent, Mercedes owner, or a video game lover.
When you let sites like Google access your location, accept cookies on a website, or use social media, your data is being collected, stored, analyzed, and sold for a profit.
There are a lot of different reasons to track you, but the one that’s most commonly used is to market to you [is] to serve you ads, says Linda Sherry, a director of national priorities for Consumer Action, a consumer rights non-profit.
The products you see — and their prices — will be based on your data, Sherry says. “If your data says you are wealthy, you may get shown different prices on websites," a practice known as dynamic pricing, she says. “And the opposite is also true, if you are poor you may be targeted for predatory loans.”
Get essential money news & money moves with the Easy Money newsletter.
Free in your inbox each Friday.
How data is being tracked & used
Personal data can be collected in a few places. Phone apps for finances, retail, or location services may store your name, address, or Social Security number. Websites can add cookies to your browser that can identify your activity on a website, and sometimes across multiple websites. Cookies are coded identifiers in your browser that show you visited one site or another, Sherry says.
“The problem is that a lot of these companies, they just don't track you when you go to their website, they cross track,” Sherry says. Let’s say you search for a hardware store like Home Depot and then go to the Lowes website or a magazine like Architectural Digest. “[A cookie] may not see every single thing you do there, but [your activity] could show you like home renovation.”
Using that data, these sites generate lists of people with similar interests. You may be put on a list of people who are interested in home improvement and start seeing more ads featuring related products. Data brokers can buy and sell these lists without your knowledge, she says.
How to protect your data online
You can take steps to limit the amount of information that is being tracked. Cookies usually pop up after clicking into a site. Some cookies let you control what information is being tracked. Sherry suggests regularly erasing your browser history, which can erase any cookies being stored there. She also recommends using your browser’s privacy mode when you know you'll be using personal information to log in somewhere or make a purchase.
This can help limit the amount of information being tracked, but it can’t stop it 100%, Sherry says. “Given the fact that the data brokers have so much information on us, it's kind of a losing battle. I hate to say that, but it is.”
There are no federal regulations on collecting personal data for marketing purposes. Some states are creating legislation to protect people online and increase regulation on data brokers. For example, California requires data brokers to register with the attorney general and pay an annual fee.
Can I make money off my data?
As an individual you can’t really make money off of your own data, Sherry says. Your info is worth very little on its own. The value is in aggregating it with other people, she says. You could take online surveys and get paid for answering questions about your habits, but you’d have to do it a lot to make it worthwhile, Sherry says.
There are some websites, like Data Coup, that offer money in exchange for your data and movements online, but it could be hard to know where your data is going. Easy Money reached out to Data Coup for a comment and did not get a response.
“It's a little tough to know exactly what you're selling to whom and how much you would be asking for it. It’s generally [being sold for] pennies on the dollar per consumer,” Sherry says.
It’s important to understand which apps and sites track your information and share it. When it comes to your money, your banking information is protected under the Fair Credit Reporting Act, which regulates credit agencies. But some financial apps, like Robinhood, may share your data with third parties “to more effectively market and personalize Robinhood services to you across other websites,” according to its website.
Image: Hugo Barbosa