Privacy Commissioner seeks powers to control the information sellers.
New Zealanders have little idea how their personal information - including on household income and ethnicity - is collected and sold, a Government watchdog warns.
The Privacy Commissioner wants powers to monitor companies that collect and sell personal information.
"Data brokers" collect publicly available information and personal details gathered by other means, including surveys doubling as prize giveaways.
They may know details about you or your household, including ethnicity, property value, what foods you buy and how often you travel.
One of the world's largest brokers, Acxiom, has a New Zealand office on Karangahape Rd in central Auckland.
Another information source is NZ Post's Genius segmentation tool which enables household profiling by income and ethnicity.
Assistant Privacy Commissioner Blair Stewart said the Privacy Act was now enforced by way of complaint.
His office has backed a Law Commission recommendation that the law be changed so the Privacy Commissioner could serve compliance notices on companies.
"People don't tend to complain about certain practices, if the sort of practices go on in the background and they can't see what's happening."
That view was supported by Auckland University Business School's Gehan Gunasekara, a specialist in information privacy law, who said the law did not recognise, for example, that privacy could apply to groups, or that some information was more personal than other information.
"New Zealanders are giving away far too much information about themselves, not really knowing what it's going to be used for," he said.
Several companies in New Zealand sell access to information on individuals or, more commonly, households.
NZ Post's Genius tool divides addresses into segments described by more than 1000 variables, including house value and ethnicity.
A sample map on NZ Post's website shows the Auckland suburb of Sandringham in the bright yellow of "Rice & Shine" homes, while Mt Roskill has more "Pacific Blend" light blue.
The Rice & Shine group has a "strong skew towards Asian ethnicity" and spends "above average on cars and smash repairs".
Genius is built from a variety of data sources, including NZ Post's own national surveys.
Another operator is Mosaic NZ, which uses data from the Census, QV, Land Information New Zealand and surveys conducted by the Roy Morgan market research company.
Most mid- to large-sized companies, as well as charities such as the Fred Hollows Foundation, use data brokers.
APN, publisher of the Herald, matches its subscriber database against Acxiom's segmentations to identify households which might be good prospects for subscriptions.
Mr Stewart said the use of data brokers was often for legitimate business activities.
Privacy Commissioner Marie Shroff raised concerns about NZ Post's first national survey, in 2009, saying people were confused about whether it was compulsory.
Nigel Paxton, head of the NZ Post division that includes Genius and direct marketing, said organisations had the legal right to target certain people.
"The key thing for any commercial organisation is that if it's operating within the law, then please don't confront them with moral issues."
The Government is expected to respond to the Law Commission's privacy recommendations next month.
How it works
"Joan Smith", 43, is a mother of two living in Mt Eden.
* A NZ Post lifestyle survey arrives in her letterbox offering the chance to win prizes, including cash and home entertainment, if she completes the survey form and sends it back.
* Mrs Smith answers 57 questions, giving details including her name, addresses, favourite magazine, credit-card limit and household income.
* NZ Post collects that and other people's information, and sells the names and addresses to companies.
* Records can be rented for $700 per 1000 records, and companies can have their own question asked in the survey for $15,000.
* Mrs Smith's family are identified as spending a lot on takeaways, so her name and address are included on a list rented to a pizza chain that is opening a store nearby.
* Some weeks later, she receives a personalised offer in the mail.
Her household's information also feeds a NZ Post marketing device called Genius.
* Genius divides more than 1.4 million households into 36 segments, using Census data and other information, including on house value and credit and debit card spending.
* Households on Mrs Smith's street are marked in the red of "Flushed with Success" - high spenders with an average household value of $909,000 and a median age of 40.
* A car manufacturer with a new model decides to target "Flushed with Success" households.
* It pays to have Genius determine which areas to market to, and which households to avoid.
NZPost - Labels
Genius Map from NZPost - Remuera Map
Genius Map from NZPost - Papatoetoe Map
By Nicholas Jones Email Nicholas