Facing Foreclosure? Avoid These Common Mistakes and Instead Take Some Positive Steps

By: Beth Michaels

Homeowners facing foreclosure are often financially stressed and emotionally overwhelmed, and this can lead to mistakes that make them worse off. If you or someone you know is facing foreclosure, avoid these common mistakes:

  1. Doing Nothing

THE WORST THING YOU CAN DO IF FACING FORECLOSURE IS NOTHING!

Lenders cannot foreclose until 120 days after your first missed payment. That means you have about four months to avoid foreclosure or minimize your losses. The sooner you act, the more options you’ll have.

  1. Falling Victim to Foreclosure Avoidance Scams

Foreclosure avoidance scams are a huge problem. Watch out for these red flags:

  • High or Upfront Fees

You do not need to pay someone to understand your options. Housing counselors approved by the U.S. Department of Housing and Urban Development (“HUD-approved housing counselors”) will help you for free. If someone wants to charge you for their services, be very skeptical!

  • Guarantying Results

No one can guaranty a result when it comes to foreclosure. Most options require your lender to agree. If someone says they can guaranty you will get a loan modification or some other foreclosure avoidance option, this person is probably not legitimate.

  • Signing Over Your Deed to a Third Party

This is a scam to get your house!

Remember, signing over your deed will not wipe out your loan. But it will cause you to lose any legal right to your house.

  • Making Mortgage Payments to Anyone Other Than Your Lender

Anyone who suggests this will probably take your money and run. Always pay your lender directly.

  • Anyone Who Tells You to Stop Talking to Your Lender

You will have to talk to your lender directly to work out any of the foreclosure avoidance options you decide to pursue. Not communicating with the bank will only make things worse, so this is very bad advice.

  • Anyone Who Tells You to Stop Paying Your Mortgage

This will only make the problem worse. You do not want to be further behind on your payments.

  • Unsolicited Contacts from Other States

Foreclosure law is different from state-to-state, so if someone from Florida is offering to help with your Colorado foreclosure, be very skeptical. A Florida lawyer or housing counselor probably doesn’t know anything about Colorado foreclosure law.

  • Remember, If It Sounds Too Good to be True, It Probably Is!

If something doesn’t sound right, don’t hesitate to contact a HUD-approved housing counselor or a lawyer.

 

So what should you do if you’re facing foreclosure?

  1. ACT RIGHT AWAY!!!

The sooner you act, the more options you will have.

  1. Contact a HUD-Approved Housing Counselor.

HUD-approved housing counselors can help you understand what your options are and what might work best for your particular situation.

In Boulder County – contact Boulder County Housing and Human Services to talk to a housing counselor.

Website: http://www.bouldercounty.org/dept/housinghumanservices/pages/default.aspx

Phone: 303-441-1000

Outside of Boulder County – contact HUD to find housing counselors near you.

Website: http://www.hud.gov/offices/hsg/sfh/hcc/fc/

Phone: 1-800-333-4636

For veterans with VA Home Loans, contact Veteran Services for foreclosure-avoidance assistance.

Website: http://www.benefits.va.gov/HOMELOANS

VA Loan Guaranty Office: 1-800-827-3702

VA Regional Loan Center for Colorado: 1-888-349-7541

  1. Contact Your Lender Right Away.

Contact your lender as soon as possible after missing a payment, or even before missing a payment if possible. This will show them that you are serious about finding a mutually-acceptable solution.

If you are having problems with your lender (e.g., they aren’t communicating with you, you feel like you’re getting the run-around, etc.), talk to a HUD-approved housing counselor, contact a lawyer, and/or file a complaint with the Consumer Financial Protection Bureau.

CFPB Website: www.consumerfinance.gov/complaint

CFPB Consumer Help Line: (855) 411-2372

Payday Lending FAQ

By: Edison

What is a payday loan?

  • Short-term loan designed to meet immediate needs
  • Generally three features
    • Small amounts
    • —Typically due your next payday
    • You must give lenders access to your checking account or write a check for the full balance in advance that the lender can deposit when the loan comes due.

How much does a payday loan cost?

  • —A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400%.
  • See my previous blog post for an example based upon Colorado law.

Are payday loans more expensive than credit cards?

  • Yes, typical credit card APRs are between 12% – 30%.  Furthermore, credit cards can be paid back over the course of time whereas payday loans are typically due all at once.

What does it mean to roll over or renew a payday loan?

  • Usually this means that you pay a fee to delay payback of the loan.  This is in addition to the original loan fees.  Sometimes these renewals will place the original fees into the principal of the new loan.  This allows fees to be charged on the new, higher loan amount.  Many states limit or ban roll overs.  You can find more information on each states roll over policy in the resources listed below.

Do online payday lenders need to follow state regulations?

  • Yes, online payday lenders must follow the regulations of the state of residence of the borrower.

Are there special regulations for Military borrowers?

Do I need to get a credit check for a payday loan?

  • No, payday lenders typically do not check the three major credit bureaus to make their determination.  Some lenders use alternative credit reporting services to determine creditworthiness.

What are some alternative solutions to payday loans?

  • —Borrow from a credit union or other small loan lender. Be sure you understand all the fees and terms before you sign.
  • Put off the expense until you have the money. For example, if you need money to repair your car, find other transportation until you have the funds to fix the car.
  • —Request overtime or secure a part-time job to cover the unexpected expense.
  • Contact your creditor and ask for more time to pay or a repayment plan.
  • —Use your credit card or obtain one if you do not currently have one. Even if you have to get a cash advance, it will be much less expensive than a payday loan.

Where can I get more information?

  • —Consumer Federation of America – Payday Loans—Great resources on state specific regulations—www.paydayloaninfo.org 
  • —Consumer Financial Protection Bureau—Government agency that provides information and complaint service for consumers—www.consumerfinance.gov 
  • —National Consumer Law Center—Nonprofit agency focusing on consumer rights issues—http://www.nclc.org

 

Choosing the Right Insurance Plan and Coverage Under the ACA

By: Ian Marable

There have been many changes to the insurance arrangement under the Affordable Care Act. Whether  you’ve been unaffected by the changes, have been forced to select a new insurance plan as a result of the ACA, or are among the 15 million remaining uninsured individuals, currently looking for insurance, this guide is designed to help you with the basic steps towards getting the right plan for you.

Grandfathered Plans

If you were previously insured before the ACA and are satisfied with your coverage and the price of your premium, you may not have to do anything in regards to getting new insurance. Many plans were “grandfathered” in under the ACA, meaning as long as the changes did not significantly violate any ACA provisions, the policy stays intact. All plans that were grandfathered in must disclose that they were, so there’s no secret of whether not your policy was grandfathered in. If, on the other hand, you wish to cancel your previous plan to seek a new one https://www.healthcare.gov/reporting-changes/cancel-plan/ has a handy guide to help you do just that.

Government Assistance

However, if you don’t have a current plan or are looking for a new one, the first step is to check whether you and your family qualify for Medicaid, the Children’s Health Insurance Program (CHIP), or subsidies to help you pay for your insurance.

Medicaid

Under the ACA, Medicaid was expanded to 133% of the federal poverty level (currently up to about $30,000 for a family of four). Although Medicaid coverage varies by state, in each state you will be covered for most: ambulatory services, visits to doctors, urgent care clinics, hospitalization, maternity, newborn care, family planning, and pediatric services. And while, a downside to Medicaid is that many doctors decide not to accept it because they get paid less than they get from other insurance plans, it can nonetheless generally provide for most of your medical needs. To see if you qualify for Medicaid or assistance go to https://www.healthcare.gov/medicaid-chip/getting-medicaid-chip/#howtoapply.

CHIP

If your income is too high to qualify for Medicaid, your children may still qualify for the Children’s Health Insurance Program (CHIP) or other related state plans. Coverage includes, among other things, prescriptions, visits to doctors, hospitalization, x-rays, ambulatory services, and dental care. If you’d like to see if your child or children qualify for CHIP choose your state and fill in the information at http://www.insurekidsnow.gov/state/index.html.

Subsidies

Even if you and your family don’t qualify for Medicaid or CHIP, you may still qualify for government subsidies to help pay for coverage. Check https://www.healthcare.gov/lower-costs/ to see if you do.

Coverage and Types of Plans

 If you don’t qualify for government assistance and you and your family are not adequately insured by your employer’s health insurance plan, then the two things you need to consider when choosing your health plan are, the amount of coverage and the type of plan that interests you. Many states such as Colorado offer free in-person and online help to help you choose what insurance plan is best for you http://connectforhealthco.com/person-help/. A simple engine search for your state may turn up similar programs too.

Coverage

In cases where no help is available in your state or if you choose to go at it alone, in general, when considering the amount of coverage, consider: what premium you can afford, how often you and your family go to the doctor, and how much you have to lose. There are four “metal categories,” with concern to coverage: bronze, silver, gold and platinum. If you and your family have a lot to lose and often go to the doctor’s office or hospital, you may want to consider a gold or platinum plan, as copayments will be lower for the many visits, but if you can’t pay as high of a premium or you and your family don’t go to the doctor’s office as much, you may want to consider a different plan. For more information about the metal categories and amount of coverage, visit https://www.healthcare.gov/choose-a-plan/plans-categories/.

Types of Plans

Types of plans too differ depending on you and your family’s specific needs. Among these plans are Health Maintenance Organizations, Exclusive Provider Organizations, Point of Service plans, and Preferred Provider Organizations. While EPOs and HMOs are generally cheaper, consumers are usually confined to providers exclusively within their network, which may create difficulties if you want to see a different doctor for a medical issue or a specialist in another area, outside the network. PPOs and POS plans, on the other hand, while more expensive, generally provide at least some coverage for doctors and medical treatment outside the network. As with anything, you’ll have to weigh the costs and benefits for your family in choosing the right type of plan. For more information on types of plans visit: https://marketplace.cms.gov/outreach-and-education/what-you-should-know-provider-networks.pdf.

Your Insurance

Each individual’s needs is different and it’s important to consider all information relevant to you and your family’s needs when deciding on your plan, and of course seek help when necessary.

Medical Debt and Bills: What to Know

By: Ian Marable

Facing confusing charges or a large medical bill can seem overwhelming at times. There may be many worries, ranging from having to pay absurd charges, to damaging your credit score, to being forced into bankruptcy, to having your home and assets seized. But it’s best not to automatically assume the worst, as there are plenty of opportunities to confront your bill, and if you get on top of it, you may find it’s not as bad as you originally thought.

Appealing your bill to your insurance company

After carefully reviewing your contract and seeing what’s covered, the very first thing you should do when you get a bill where you disagree with charges, think there’s a mistake, or don’t think you’ll be able to pay the bill is to appeal it to your insurance company. Most insurance companies have online appeal forms or an online appeal application built into their website. Often times you can simply fill out the form or answer the questions posted and click submit, generally expecting an answer within a couple of weeks.

If you’re unable to locate the online form or application or are not sure if your insurance company provides one, then call your insurance company and ask them about their appeal process. Most companies are more than happy to help you with any problems you may have regarding the appeal process. Pay close attention to the deadline for appealing your bill because once you hit the deadline they may turn your bill over to a collection’s agency, and it will be much harder for you to work out any sort of resolution to your problem.

Working out a repayment plan with your hospital and insurance company

If you still find yourself unable to pay your bill after having appealed it to your insurance company, consider asking your insurance company and your hospital about whether they can set up a payment plan for you, and be sure to tell them what kinds of payments you can make. Although not all hospitals and insurance companies are willing to work out payment plans, many are.

Insurance companies and hospitals are often very reluctant to turn over your bill to the collection’s agency because it often means they get only a small portion of the payment they would have gotten. As a result, many are willing to work with patients to help give them an opportunity to pay without going through a third party. Be sure to politely inquire whether your insurance company and hospital are open to such an arrangement if you feel the monthly bills are too high.

Consulting experts about your bill

If, after the appeal process, you still think certain charges are unfair, incorrect or are covered by your contract, and want to dispute them, consider consulting legal experts about your bill. Legal experts may be able to help you determine your remaining options in an insurance dispute, based on your contract, help you settle it for less, and help you review your other contract provisions with your insurance company.

Depending on the contract, especially if arbitration for settlement is mandatory, you may want to consider hiring a lawyer to help you get through the lengthy, complicated process, as it could save you in the long-run.

Bankruptcy

Although a last resort, if your medical bills are high enough this might be an option to consider. Medical debt is an “unsecured debt” that would be wiped out by chapter 7 bankruptcy. Still, it’s not something to consider lightly, as there are long-ranging consequences. To get more information on bankruptcy check out our posts about it on myconsumertips.info.

What not to do:

Don’t pay off your bill using credit cards

Although it may seem tempting to have your bill “paid off” by using credit cards, this is a common mistake. While you will no longer have medical bills you will still owe the same amount but at a much higher interest rate. Medical bill interest rates are quite low, while credit card interest rates are very high.

Don’t assume that just because you’re paying the minimum that means they won’t turn over your bill to a collection’s agency

Be aware of hospital’s policy towards payments and turning them over to collection’s agencies. There’s no universal rule of when a hospital can or cannot turn your bill over to a hospital, so it’s important to know your hospital’s general policy.

Obtaining the Same Protection of Credit Cards When Making a Purchase with Cash or Debit Cards Online

By: Aaron Fransua

Shopping online comes with at least some inherent risks. There’s a risk that the product you purchased doesn’t arrive, a risk that it gets damaged during shipment, or even a risk that the shirt that gets delivered is different from what the seller portrayed online.

Many credit cards offer protections that will cover you in the event any of these problems occurs. But what if you paid for your order using your debit card or an EFT from your bank account? Typically, debit cards and EFT transfers will not cover you if something goes wrong with your online purchase, which is a significant disadvantage if you are trying to be responsible and not use a credit card for every purchase.

Fortunately, there still are methods that you can use to reap still the protections that credit cards provide for online orders even with paying with your debit card or bank account. Services such as Amazon Pay or Paypal are excellent alternatives that will allow you to pay for online orders with your debit or bank accounts while minimizing the typical risks associated with those online purchases.

Both services offer virtually the same guarantees, just operate under different names. For Amazon, it is their “A-to-Z protection.” (Btw here is fun little tidbit for you, this guarantee is portrayed in their logo, with the arrow pointing from the A to the Z). For Paypal, the guarantee operates under their Purchase Protection Plan.

As you can see from the above chart, the two payment options are pretty similar to one another. The largest difference is that Paypal gives the consumer double the time to file claims on any problems they may have.

Since these services allow you to purchase your online orders using debit cards or your bank account, they are excellent alternatives to paying with a credit card, and still have some peace of mind when you buy online.

 

Obtaining the Same Protection of Credit Cards When Making a Purchase with Cash or Debit Cards Online

By: Aaron Fransua

Shopping online comes with at least some inherent risks. There’s a risk that the product you purchased doesn’t arrive, a risk that it gets damaged during shipment, or even a risk that the shirt that gets delivered is different from what the seller portrayed online.

Many credit cards offer protections that will cover you in the event any of these problems occurs. But what if you paid for your order using your debit card or an EFT from your bank account? Typically, debit cards and EFT transfers will not cover you if something goes wrong with your online purchase, which is a significant disadvantage if you are trying to be responsible and not use a credit card for every purchase.

Fortunately, there still are methods that you can use to reap still the protections that credit cards provide for online orders even with paying with your debit card or bank account. Services such as Amazon Pay or Paypal are excellent alternatives that will allow you to pay for online orders with your debit or bank accounts while minimizing the typical risks associated with those online purchases.

Both services offer virtually the same guarantees, just operate under different names. For Amazon, it is their “A-to-Z protection.” (Btw here is fun little tidbit for you, this guarantee is portrayed in their logo, with the arrow pointing from the A to the Z). For Paypal, the guarantee operates under their Purchase Protection Plan.

As you can see from the above chart, the two payment options are pretty similar to one another. The largest difference is that Paypal gives the consumer double the time to file claims on any problems they may have.

Since these services allow you to purchase your online orders using debit cards or your bank account, they are excellent alternatives to paying with a credit card, and still have some peace of mind when you buy online.

 

Understanding Credit Cards

By: stu.climber

Credit cards work on the basis of borrowing money. When a consumer is issued a credit card the credit card company attaches a certain amount of credit to the card. When a consumer uses the credit card to make a purchase the consumer is borrowing money from the card issuer in order to pay for their purchase. Then, at a later date the consumer must pay back the card issuer. If the consumer pays back the card issuer past the statement due date the consumer will typically be required to pay back the money borrowed plus a specified amount of interest.

Credit cards will always require a credit card agreement which describes the features of the card as well as the relationship between the credit card company and the consumer. These agreements are usually dense and complex and anyone interested in understanding these agreements better should check the CFPB credit card agreement webpage. As stated above credit cards work by borrowing money from the card issuer and then paying the card issuer back for all of the authorized charges plus any interest or fees. Once again the CFPB provides excellent resources for the consumer posting a survey of credit card features. This is particularly helpful for consumers who need to find credit cards with features to meet their needs and available in their state.

If a credit card consumer consistently pays their credit card bills on time then the credit card consumer begins to build their credit score, a number used to predict how likely you are to pay back a loan on time, higher. (Anyone interested in finding out more about credit scores should check out CFPB’s “How do I get and keep a good credit score?”). If a credit card consumer is unable to pay their credit card company back the consumer may get hit with extra fees and increased interest rates increasing the consumer’s credit card debt. Unfortunately, once a consumer starts falling behind on payments it becomes more difficult to pay the increasing debt.

One of the main dangers of a credit card are that the consumer can lose track of their spending and spend more than they are able to pay. It is important that a consumer keep track and budget their use of a credit card. Not only will this help a consumer build their credit score and keep their debt low but also notice and report unauthorized charges on the card.

Understanding Pre-paid cards

By: Stu.climber

Many people don’t realize that pre-paid cards and credit cards are not the same thing, although a pre-paid card may have a card network logo (like Visa, MasterCard, Discover, etc.) on it, this card is different from a credit card. When you use a prepaid debit card to make a purchase you are spending money that has already been paid to put on the card. Credit cards and per-paid cards have different advantages and disadvantages for the consumer and it’s important to understand them for more information on credit cards see my previous post .

Typically there are two types of pre-paid cards. “Open-loop” cards are prepaid cards which have a network logo on them (Visa, MasterCard, American Express, or Discover) and can be used at any location that accepts that network. “Closed-loop” cards don’t have a network logo and typically can only be used at one store or group of stores, like a Starbucks gift card. Pre-paid cards that you can only use for a specific purpose, such as a transit card, is also a closed-loop card.

Prepaid cards can be reloadable, meaning you can add more money to them, or non-reloadable, meaning you can’t add money to them. A consumer will put a set amount of money on the card say $50. That card then can be used to purchase up to $50 worth of goods or services from business who accept that pre-paid card. The pre-paid card would then be unable to purchase more goods or services until more money is put back onto the card. However, many pre-paid cards will have additional fees or restrictions associated with its use and it’s important for consumers to understand how these fees and restrictions work.

The most common fees associated with pre-paid cards are monthly maintenance fees and transaction fees. A monthly maintenance fee is exactly what it sounds like a fee charged each month to maintain the card and account. With transaction fees, a fee is deducted from the balance on the card each time you use your card or for using the card more than a certain amount each month. If a consumer uses their card frequently, these transaction fees can add up very quickly. You may pay more for a card with transaction fees than with a card with a monthly fee, so you consumers should think about how they will use their card before deciding what type of card to get. In addition, some prepaid cards will waive the monthly fee if the consumer makes at least a certain number of purchases, loads a minimum amount of money each month, or links the pre-paid account to a direct deposit.

Privacy in the Digital Age: Data Tracking and Data Brokers

By: Dylan Sheji

It’s a bit of an understatement to say that the Internet changed everything, because it most certainly did. Almost all of humanity’s combined knowledge can be found on the Internet. Friends and family members that live thousands of miles away from each other can be brought together with a single click. There are billions of websites are out there that Internet users browse daily that have a wide range of utility. But as you browse the Internet, have you noticed that the ads you see on websites are starting to follow you? And that they relate to previous Internet searches or websites you’ve visited? These targeted ads are consequences of data tracking, the analysis of Internet user behavior on websites in order to identify buying intentions or interests. The blog posts I write will discuss data tracking, the companies tracking data, how Internet data is tracked, and methods we consumers can use to push back against the collection of our data. This blog post will discuss the concept of data tracking, the companies that track consumer data, and methods of data tracking.

As I said above, data tracking is the analysis of our Internet behavior in order to target consistently annoying personalized ads at us. Data tracking monitors your Internet activity similar to how your credit report tracks you with regards to your financial history. The companies that collect this information are called data brokers. Data brokers take the information they gather and sell it to other companies, namely advertising and marketing companies, in order to directly appeal and advertise to specific groups of Internet users. This is the reason why ads seem to follow us; companies are getting your Internet data in real time and directly advertising to you.

Who are these companies that are tracking our data? Some are foreign to a majority of consumers while others are names we see every day. For example, Facebook and Twitter, repositories of much of our personal data, are some of the top data brokers. And for good reason: we willingly publish so much information about ourselves on these public platforms, and as their privacy statements make clear, what we share is readily available to the rest of the world, including other data brokers and advertising companies. Facebook further developed it’s utility to advertisers in 2014, when it bought Atlas, an ad server, from Microsoft. Atlas allows marketers to measure consumer data and target consumers across all digital sites, not just limited Facebook, and even across every type of device. Other data broker companies are relatively unknown to the average consumer, for example the largest data broker, Axciom, which collects on average 1,500 pieces of information on more than 200 million Americans. Another such company is eBureau, a company that sells Internet profiles to online marketers complete with a real-time scoring system for about 220 million Americans, so that marketers can sell you exactly what you need when you need it.

Now that you know who is tracking our data and why, how do these sites collect information from their users in the first place? The main method of tracking is through “cookies,” small bits of text that are downloaded to one’s browser as one uses the web. These text files contain small strings of numbers that can be used to identify individual computers. Cookies can come the website the user is visiting, called first-party cookies, or from some other website, called third party cookies. First party cookies used by websites are typically not used for advertising, but to analyze website traffic and figure out who is visiting the site and why in order to increase traffic. Third party cookies are more insidious, and can come from any of the companies I listed above without consumer approval or awareness. Most websites have a variety of third party cookies hidden within them. Facebook and Twitter widgets that one sees on many websites also contain these third party cookies. Cookies lack any personal identifiers and aggregate a user’s tracking data from multiple sites to infer interests. This “aggregated not personal” concept is the reason why these tactics are legal; they are anonymous data bits used for marketing purposes and not to track your credit or finances, which is heavily regulated by the government.

At this point all of this data tracking sounds a little too Big Brother, and though there can be positive benefits to receiving personalized ads for items you may actually really need, the easy dissemination of our data is nonetheless frightening. Fear not consumers, in my next blog post I will go over various methods to prevent data brokers from analyzing your Internet data.

Privacy in the Digital Age: Data Tracking and Data Brokers

By: Dylan Sheji

It’s a bit of an understatement to say that the Internet changed everything, because it most certainly did. Almost all of humanity’s combined knowledge can be found on the Internet. Friends and family members that live thousands of miles away from each other can be brought together with a single click. There are billions of websites are out there that Internet users browse daily that have a wide range of utility. But as you browse the Internet, have you noticed that the ads you see on websites are starting to follow you? And that they relate to previous Internet searches or websites you’ve visited? These targeted ads are consequences of data tracking, the analysis of Internet user behavior on websites in order to identify buying intentions or interests. The blog posts I write will discuss data tracking, the companies tracking data, how Internet data is tracked, and methods we consumers can use to push back against the collection of our data. This blog post will discuss the concept of data tracking, the companies that track consumer data, and methods of data tracking.

As I said above, data tracking is the analysis of our Internet behavior in order to target consistently annoying personalized ads at us. Data tracking monitors your Internet activity similar to how your credit report tracks you with regards to your financial history. The companies that collect this information are called data brokers. Data brokers take the information they gather and sell it to other companies, namely advertising and marketing companies, in order to directly appeal and advertise to specific groups of Internet users. This is the reason why ads seem to follow us; companies are getting your Internet data in real time and directly advertising to you.

Who are these companies that are tracking our data? Some are foreign to a majority of consumers while others are names we see every day. For example, Facebook and Twitter, repositories of much of our personal data, are some of the top data brokers. And for good reason: we willingly publish so much information about ourselves on these public platforms, and as their privacy statements make clear, what we share is readily available to the rest of the world, including other data brokers and advertising companies. Facebook further developed it’s utility to advertisers in 2014, when it bought Atlas, an ad server, from Microsoft. Atlas allows marketers to measure consumer data and target consumers across all digital sites, not just limited Facebook, and even across every type of device. Other data broker companies are relatively unknown to the average consumer, for example the largest data broker, Axciom, which collects on average 1,500 pieces of information on more than 200 million Americans. Another such company is eBureau, a company that sells Internet profiles to online marketers complete with a real-time scoring system for about 220 million Americans, so that marketers can sell you exactly what you need when you need it.

Now that you know who is tracking our data and why, how do these sites collect information from their users in the first place? The main method of tracking is through “cookies,” small bits of text that are downloaded to one’s browser as one uses the web. These text files contain small strings of numbers that can be used to identify individual computers. Cookies can come the website the user is visiting, called first-party cookies, or from some other website, called third party cookies. First party cookies used by websites are typically not used for advertising, but to analyze website traffic and figure out who is visiting the site and why in order to increase traffic. Third party cookies are more insidious, and can come from any of the companies I listed above without consumer approval or awareness. Most websites have a variety of third party cookies hidden within them. Facebook and Twitter widgets that one sees on many websites also contain these third party cookies. Cookies lack any personal identifiers and aggregate a user’s tracking data from multiple sites to infer interests. This “aggregated not personal” concept is the reason why these tactics are legal; they are anonymous data bits used for marketing purposes and not to track your credit or finances, which is heavily regulated by the government.

At this point all of this data tracking sounds a little too Big Brother, and though there can be positive benefits to receiving personalized ads for items you may actually really need, the easy dissemination of our data is nonetheless frightening. Fear not consumers, in my next blog post I will go over various methods to prevent data brokers from analyzing your Internet data.