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Seen At 11: Authorities Crack Down On Data Brokers Who Track Your Web Activity

NEW YORK (CBSNewYork) -- Federal authorities have launched a crackdown on data brokers – people who track your every search and purchase on the Internet and sell the information.

As CBS 2's Don Dahler reported Tuesday, experts have also issued a warning about divulging too much information online.

Rod Laurenz bought a box of baby wipes online, and the next thing he knew, his email was bombarded with deals for more children's products – something the single man said he is not interested in right now.

"It does lead to some concerns," said Laurenz, a financial planner. "How much do they know? And how much can then be determined about a person?"

Consumers said it happens all the time – they're scrolling around the Internet, and up pops an ad that is a little too close to home.

"I get a little weirded out," one Internet user said.

"It's an invasion of my privacy," another said.

"It's very upsetting," a third said.

But now, the Federal Trade Commission is investigating the practices of the data collection industry.

"We really wanted to look under the hood of these companies and see exactly who they're buying this information from, how much information they have, what they use it for, and who they share it with," said Maneesha Mithal of the FTC.

Besides knowing what you buy and where you shop, the FTC said data brokers may also be keeping tabs on your health problems, who your social media contacts are, if you pay your bills on time, and if you've spent time in jail – all information the agency finds concerning.

"First is that data brokers are selling information that companies could use to deny people employment, or credit, or insurance," Mithal said.

But the Direct Marketing Association, which represents the data brokers, argues that its practices are legal. It also argues that the largely self-regulated industry should stay that way.

"If you do something incorrectly, it's known. It's out there in the blogs," said Jerry Cerasale of the Direct Marketing Association. "Your reputation is harmed, and companies will make immediate changes."

Both the federal government and the Direct Marketing Association agree the multi-billion dollar data brokerage industry is critical. Targeted marketing drives consumer spending, which is a driving force in the economy.

"It's going to get us out of this recession," Cerasale said. "It's going to get us out of it faster, and it's going to keep America in the lead."

Once the FTC finalizes its investigation, the agency said it will make recommendations about industry practices, and possibly ask Congress to regulate it more, including offering consumers the option to opt out of being tracked.

Do you think data brokers should be regulated more strictly? Please leave your comments below...

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