Advertising may be a necessary evil for those of us that would rather not pay to use Facebook and Twitter, but trading privacy for free services has proven a double-edged sword. Since the introduction of targeted advertising, many users have garnered the impression that advertisers are granted access to their interests. Looking under the hood, you’ll actually find that Facebook and Google advertisers are not privy to personal details about individual users. But there is a far more nefarious advertising practice that has managed to keep its distance from the public’s eye.

Between social networks and the advertisers they serve lie “data brokers,” third parties that buy and sell detailed information about you to advertisers. Where you live, how much you paid for your house, who you’re related to, your hobbies and interests, and just about every detail these corporations can learn about your life is fair game.

“Typically with online advertising, it’s not about the individual. It’s rather about the demographic. [Data brokering] is about the individual, where they’re sending a catalogue to their house and finding that specific person as opposed to an online profile,” says Robert Leshner, CEO and co-founder of Safe Shepherd, a private data removal service.

Companies like Acxiom will compile and sell that information to marketers by scouring through public records, purchasing cookies, and scraping data from social-network profiles. Here, the privacy settings that you set on your social network profiles become important. Individuals who don’t control their privacy settings and social networks will often times find that their information can be found in far more databases than those who control their privacy settings. Coupling your online social data and habits with public records is a goldmine for data brokers, and a Pandora’s box for advertisers.

“Knowing that you bought a house for $200,000 is valuable for advertisers, but knowing that you bought a house for $200,000 and love motorcycles is even more valuable,” Leshner explained.

The scale of Acxiom’s database, which was the subject of a New York Times article, is massive. Acxiom has already collated a database of 500 million people and 1,500 data points per person, yet fewer than 100 people per year will request a data report.

Leshner says that most of this information is sold to offline businesses to be used offline, and not online. If you’ve received junk mail from banks, automakers, or on occasion a “Happy Birthday” gift card with a free “gift” from a company like Gillette, it’s an indication that advertisers know more about your life than you’d like to reveal.

For those of you worried about the transparency of your information, Safe Shepherd’s service, for free or a small fee depending on the thoroughness, can opt you out of marketing databases or prevent your personal information from being included in deals with advertisers. At the moment, however, Safe Shepherd can only opt out users from the “worst offender” databases. With the innumerable marketing services competing with Acxiom to appease data-hungry advertisers, an untold number of smaller firms already exist, not to mention that opting your information out is a never-ending game of cat and mouse.

The data-brokering industry has flown below the radar, but its non-transparency with consumer data has caught the Federal Trade Commission’s eye. Consumers who request a report on themselves are not offered the complete data that brokers would sell to advertisers, but it’s a practice that the FTC would like to regulate. “Consumers should have access to all the details that data brokers collect on them, as well as any analyses that the companies sell about their behavior,” Julie Brill of the Federal Trade Commission told the New York Times. Not surprisingly, these data brokers are lobbying for self regulation.

But as technology grows more sophisticated, so do a data broker’s practices. These days, as Leshner explains to Digital Trends, the data broker’s efforts have shifted to the development of mobile applications. “The trend that we’re seeing right now is that many data broker companies like MyLife and Intellius are launching their own apps with very little value proposition, simply to collect personal information of its users,” Lesher said.These apps require you to sign up with Facebook or Twitter, granting the app developers access to your newsfeed, posts, work history and other information.

If there’s an indicator for the consumer’s awareness about their privacy, Safe Shepherd is it. Safe Shepherd, founded by Geoff Hayes and Robert Leshner in August 2011, saw a significant number of new users and subscribers just in the past six months. Leshner declined to specify the number of subscribers, but its user base totals approximately 50,000 users to date.