Ever received an email from a company you’ve never heard of? Or, worse, a phone call from someone you suspect is trying to scam you? While these occurrences can be off-putting, you assume they happen because they got your data somehow. Maybe it’s from public records or last week’s online purchase. However, where they got it isn’t as important sometimes as wishing they hadn’t.
It’s one thing to exchange select details with a company you want to do business with. But messages you perceive as intrusive are inconvenient and frustrating. As a consumer, it’s helpful to understand what types of data organizations can collect. Even more beneficial is knowing how you can protect your privacy. Here are four data types to be aware of.
1. Data You Willingly and Knowingly Exchange
You’ve exchanged valuable data if you’ve ever participated in a company’s online quizzes and loyalty programs. It’s known as zero party data, a type of information marketers consider a prize. You know you’re providing the data and are willing to do it.
Therefore, it shouldn’t be surprising when the company contacts you by email and direct mail. You’ll probably anticipate notifications about exclusive savings and newly launched products. The company can personalize the interactions to make them more memorable and less likely to be ignored. Furthermore, you exchange your information with the promise the receiving end will keep it safe.
There are often terms and conditions when providing zero party data, including how the business intends to use it. You might have to read the fine print to know what you’re getting into. Going through these details helps you protect your data by understanding the company’s intentions. You might be OK with getting loyalty discounts if the business won’t sell or exchange your information with third parties.
2. First-Party Data
First-party data is information you exchange with organizations firsthand. At the same time, you aren’t always aware you’re providing it. First-party data can come from your purchases. This information might also originate from the way you browse a company’s website, even if you don’t buy something.
Organizations could also pick up data about you from customer service calls, text message conversations, and social media interactions. In some cases, you’re willingly providing details about yourself to get something in return. An example is when a sales rep asks about your buying habits and preferences. You can refuse, but it will make it increasingly difficult for the rep to match you with suitable products.
In other scenarios, you might make in-app purchases and save items to a wish list. You’re not giving much thought to these activities, but you later receive an email in your inbox. The message highlights this week’s sale or loyalty program opportunity for your favorite items. Most of the time, messages like these are a welcome surprise. However, it’s important to recognize phishing attempts, as hackers often imitate legitimate emails.
Hackers also target consumers with account-based data, including subscriptions to streaming services and logins for online retailers. A red flag is the email will ask you to take action immediately or face consequences. When in doubt, check the sender’s email domain name, look for grammar and spelling errors, and report the email. Don’t download attachments or click on links. You can also hover over any links and buttons to see the URL the link goes to.
3. Second-Party Data
Second-party data is first-party data another company has collected. The organization reaching out to you has gotten it from the other company through a strategic partnership. Sometimes, organizations purchase second-party data from different companies. When you provide first-party data, you may have noticed fine print indicating the business might exchange your information with others.
Say you purchase new energy-efficient windows for your home. The company you select collects your name, address, and details about your house. This first-party data could make its way to the window installer’s affiliates. Months later you get mailers advertising solar panels and high-efficiency home appliances. To the affiliates, your information is part of a list of contacts who are more likely to make a purchase.
Most companies have ways to opt out of the exchange of your data. It might take some effort, but you can choose this option. If you don’t want your information passed on to affiliates or sold, it can save you from intrusive contacts later. Opting out early is the best way to protect your data from getting into the hands of companies. It puts you in the driver’s seat, reducing the number of times your info gets bought and sold.
4. Third-Party Data
The use of third-party data is perhaps the most controversial and troublesome for consumers. It’s usually aggregate data compiled by a source that didn’t collect it. In addition, the external entity sells it to other firms. The companies buying the data might simply use it for research purposes, helping to bolster or inform strategies. On the other hand, marketers sometimes use third-party data to target you with their messages.
These are the typically unwelcome advertisements and emails you get out of the blue. You may have never heard of the company and aren’t sure how they got your data. Although third-party data sources are becoming more restricted and less acceptable, the practice is still happening.
As a consumer, you do have some ways to protect your information. For instance, the Federal Trade Commission lets you opt out of prescreened credit and insurance offers. Opting out is one way to protect your financial privacy. Be sure to read the privacy notices of every company you exchange personal information with. Opt-out when possible, use multi-factor authentication for your online accounts, and check your credit report regularly.
Consumer Data Types
Unless you don’t make purchases, your data is out there. As a consumer, it’s important to understand how companies collect, use, and exchange your information. With this knowledge, you can learn to control what data you share to protect and manage your privacy.
Written by Adam Eaton
