Introduction
In today's digital economy, your personal information has become a valuable commodity—bought, sold, and traded by companies you've never directly interacted with. Data brokers collect, aggregate, and sell details about your demographics, purchasing habits, online activities, and even sensitive information like health conditions or financial status.
As consumers become more aware of these practices, class action lawsuits against data brokers have surged. These cases challenge the legality of collecting and monetizing personal information without proper notice, consent, or compensation to the individuals whose data is being traded.
This article examines the growing trend of data broker class actions, recent settlements, and how consumers can participate in these lawsuits to assert control over their personal information and potentially receive compensation when their data privacy rights have been violated.
What Are Data Brokers?
Data brokers are companies that collect information about individuals from various sources, analyze it, package it, and sell or license it to third parties. Unlike companies that collect data directly from their customers, data brokers often gather information indirectly through:
- Public records (property records, court documents, voter registrations)
- Online tracking technologies (cookies, pixels, digital fingerprinting)
- Purchase histories and loyalty programs
- Social media activity and content
- Surveys and questionnaires
- App usage and mobile device data
- Website browsing behaviors
This information is then combined to create detailed profiles of individuals, which are sold to various entities for purposes including:
- Marketing and targeted advertising
- Risk assessment and fraud prevention
- Background checks and employment screening
- Tenant screening
- Insurance underwriting
- Financial services qualification
Some major data brokers maintain files on virtually every adult consumer in the United States, with thousands of data points per individual. This massive collection and commercialization of personal information has increasingly become the target of class action litigation.
Legal Issues With Data Broker Practices
Several problematic practices have made data brokers vulnerable to class action lawsuits:
- Lack of transparency: Many consumers are unaware that data brokers collect and sell their information, with no direct notification provided
- Absence of consent: Data is often collected and sold without obtaining meaningful consent from the individuals involved
- Inaccurate information: Profiles may contain errors that can harm consumers when used for decisions about employment, housing, or credit
- Lack of opt-out mechanisms: Some brokers make it difficult or impossible for consumers to remove their information
- Discriminatory impacts: Data categorization can result in differential treatment based on protected characteristics like race, gender, or age
- Sale of sensitive information: Health conditions, financial vulnerabilities, or other sensitive details may be commercialized without adequate protections
These practices may violate various laws, including:
- State consumer protection statutes
- The Fair Credit Reporting Act (when information is used for credit, employment, or housing decisions)
- State-specific privacy laws like the California Consumer Privacy Act (CCPA) and Illinois Biometric Information Privacy Act (BIPA)
- Data breach notification laws (when information is not adequately secured)
- Federal Trade Commission Act provisions against unfair or deceptive practices
Recent Class Actions Against Data Brokers
Several significant class actions against data brokers have emerged in recent years:
Data Collection Without Consent
A landmark class action against a major data broker alleged the company collected and sold information about millions of consumers without their knowledge or consent. The lawsuit claimed violations of state privacy laws and common law rights. The case ultimately settled for $150 million, with affected consumers receiving compensation and the company agreeing to implement more transparent practices.
Biometric Data Collection
Multiple class actions have targeted brokers that collect, analyze, and sell biometric information such as facial recognition data. These cases typically allege violations of state biometric privacy laws, particularly Illinois' BIPA, which requires explicit consent before collecting such data. One such case resulted in a $35 million settlement.
Location Data Tracking
Several data brokers faced class actions for tracking and selling consumers' precise location data without adequate disclosure or consent. In one case, a broker that aggregated location data from mobile apps settled for $18 million after allegations that the company's practices violated state privacy laws and consumer protection statutes.
Health Information Profiling
A class action against a data broker that created and sold health-related consumer profiles alleged violations of various state laws protecting sensitive health information. The lawsuit claimed the broker used online activity to infer health conditions and sold this information to pharmaceutical companies and insurers without consumer knowledge or consent.
Significant Settlements and Outcomes
Data broker class actions have resulted in several notable settlements:
- A $65 million settlement with a broker that sold financial information to marketers without properly disclosing this practice to consumers
- A $30 million settlement resolving claims that a data analytics company violated state privacy laws by collecting and selling social media data without user consent
- A $25 million settlement with a data broker that allegedly misrepresented its opt-out procedures and continued to sell information after consumers requested removal
- A $13.5 million settlement with a broker that allegedly failed to properly secure sensitive personal information, resulting in a data breach
These settlements typically include both monetary compensation for affected consumers and injunctive relief requiring changes to business practices, such as:
- Enhanced disclosure of data collection and use
- Implementation of more accessible and effective opt-out mechanisms
- Limitations on the types of data that can be collected or sold
- Stronger data security requirements
- Regular third-party audits of compliance with privacy laws
- Deletion of certain categories of data
Impact on Data Broker Industry Practices
Class action litigation has begun to reshape industry practices in several ways:
Increased Transparency
Many data brokers now provide more detailed information about their data sources and uses, often publishing privacy policies that specifically address their role as data brokers rather than hiding behind vague language.
Opt-Out Centralization
Some industry associations have developed centralized opt-out tools that allow consumers to remove themselves from multiple brokers' databases simultaneously, rather than having to contact each company individually.
Data Minimization
Facing legal pressure, some brokers have begun to limit the collection and retention of certain types of sensitive information or implemented stronger anonymization techniques.
Consent Mechanisms
Advanced consent frameworks are emerging, with some brokers developing more explicit permission systems, particularly for sensitive categories of information.
Accuracy Verification
More robust processes for verifying data accuracy and handling correction requests have been implemented by companies that have faced litigation over erroneous profiles.
Despite these improvements, significant concerns remain about the data broker ecosystem, and class action litigation continues to be an important driver of reforms in this largely unregulated industry.
How to Join Data Broker Class Actions
If you're concerned about data brokers collecting and selling your information, you may be eligible to participate in class action lawsuits. Here's how:
- Watch for notices: Class action settlements often require data brokers to notify potential class members through email, postal mail, or digital advertising
- Check settlement websites: Visit case-specific websites that provide information about eligibility and the claims process
- Verify eligibility: Determine if you meet the class definition, which may be based on factors like your state of residence or whether your data was included in a particular database
- Submit claims: File claim forms by the specified deadlines, providing any required documentation or attestations
- Monitor distribution: If the case results in a settlement, payments are typically distributed months after the claims deadline
Services like GetBack can help you identify data broker class actions you may qualify for. This is particularly valuable since data collection typically happens without consumer knowledge, making it difficult to know which cases might apply to you.
Protecting Your Personal Information
While class actions provide a remedy after privacy violations occur, you can also take proactive steps to limit data broker collection of your information:
- Exercise opt-out rights: Visit data broker websites to request removal of your information, or use services that submit opt-out requests on your behalf
- Limit online sharing: Adjust privacy settings on social media and review permissions for apps and websites
- Use privacy tools: Consider browser extensions that block tracking, VPNs, and private browsing modes
- Be cautious with surveys and promotions: Avoid unnecessary sharing of personal information for small rewards or discounts
- Check public records: Some states allow you to shield certain public records from commercial use
- Review your rights: Familiarize yourself with privacy laws in your state, which may provide specific protections or opt-out rights
Remember that data broker practices are constantly evolving, so staying informed about new collection methods and your legal rights is an ongoing process.
Conclusion
Class action lawsuits have emerged as a powerful tool for challenging data broker practices that collect and monetize personal information without adequate transparency, consent, or security. These cases not only provide compensation to affected individuals but also drive important changes in industry standards and practices.
As privacy laws continue to evolve and public awareness grows, we can expect to see more litigation targeting data brokers, particularly those dealing in sensitive categories of information or using deceptive collection practices. These lawsuits represent an important mechanism for consumers to assert control over their personal information in an increasingly data-driven economy.
If you're concerned about data brokers' use of your information, consider researching your opt-out rights, implementing privacy protection measures, and checking if you qualify for any ongoing class actions. Through both individual action and collective legal challenges, consumers can work to regain control over how their personal information is collected, used, and monetized.