Ever wonder what happens to all the data we give away in our daily interactions with the consumer marketplace? It's not a pretty picture.
Data brokers are collecting and segmenting information on Australians into hundreds of thousands of detailed categories. They then sell that segmented and categorised data to advertisers.
That much is generally known, but what may come as a shock is just how granular – and predatory – the advertising based on this data can be.
These categories include details about those facing financial difficulties or dealing with gambling problems, as well as data points on alcohol consumption and the spending habits of adolescents.
A new report by research and policy organisation Reset Australia is calling for law reform and stronger regulation of the data collection and broking industry after the data broking practices outlined above were unveiled by an Austrian researcher.
"Australia's privacy framework is up for review and there's a lot of other policy movement in all of these discussions that are happening in Canberra at the moment," says Rys Farthing, director of policy at Reset Australia.
"We felt that actually what had been overlooked in this was the perniciousness of the data collection involved in targeted advertising and just how manipulative the practice can be at its core."
Xandr file
At the centre of the report is the detailed segmentation of hundreds of thousands of Australians by Microsoft-backed advertising platform Xandr, which was discovered online by Austrian researcher Wolfie Christl.
It shows how people in financial distress are segmented for advertisers who can then promote the sale of products such as payday loans and other unscrupulous financial products.
Persistent targeted advertising campaigns can be incredibly effective at pushing people into risky financial products
Some of the segmented data includes "people by their debt-to-service ratio", "retirees living on minimal incomes" and "people receiving income from government pensions".
Farthing says persistent targeted advertising campaigns can be incredibly effective at pushing people into risky financial products.
"Advertisers say that targeted ads are just these harmless things that we have to put up with in exchange for using the internet and the digital world. But actually, there is a really harmful underbelly to this," Farthing says.
'Tip of the iceberg'
CHOICE consumer data senior campaigns and policy adviser Rafi Alam says the targeting of those in financial distress is concerning.
"Many consumers would be shocked to hear that businesses can target people based on their credit risk, whether they receive government allowances, and even their Christmas budget. It's disturbing to know that businesses can search for segments with names such as 'people living in underprivileged circumstances', 'struggleville', or 'financial distress'.
Tom Abourizk from Consumer Action Law Centre says they have seen predatory payday lenders repeatedly use targeted advertising to get to those who are financially desperate.
Many consumers would be shocked to hear that businesses can target people based on their credit risk, whether they receive government allowances, and even their Christmas budget
Rafi Alam, CHOICE consumer data senior campaigns and policy adviser
"We see people receiving targeted advertising on social media, in emails and even text messages – when they are experiencing hardship – encouraging them to take out a payday loan, or at times like Christmas when there are expenses coming up," he says.
Alam adds that the Xandr file discovered is likely only the tip of the iceberg.
"AdTech and data broking are both opaque sectors, so we might not even be close to understanding the extent of our data being collected and used," Alam says.
"From a legislative perspective, CHOICE has backed plans from the government to reform the Privacy Act and has strongly advocated for a prohibition on unfair trading practices. Ideally, we'd also see stronger action that allows consumers to opt-out of targeted advertising," he adds.
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