Data Broker Registration Laws: Which States Require It?

Your personal information is valuable. Data brokers know this, which is why they've built billion-dollar businesses collecting, aggregating, and selling your data to anyone willing to pay. But in recent years, lawmakers have started fighting back with data broker registration laws designed to create transparency and accountability in this largely unregulated industry.

If you're concerned about your privacy, you need to understand which states require data broker registration and what these laws mean for protecting your personal information. This comprehensive guide breaks down the legal landscape, explains who's affected, and shows you what steps you can take to reclaim your privacy.

Overview of the Legal Framework

Data broker registration laws represent a significant shift in how states approach privacy regulation. Unlike broad consumer privacy laws like the California Consumer Privacy Act (CCPA), data broker registration laws specifically target the companies that collect and sell personal information.

The Evolution of Data Broker Regulation

The first state to require data broker registration was Vermont in 2018. Vermont's data broker law created a mandatory registry requiring companies that collect personal information to register with the state's Attorney General before conducting business. This pioneering approach set a precedent that other states would eventually follow.

Since Vermont's groundbreaking legislation, several other states have enacted their own data broker registration requirements:

California – Implemented a data broker registry through amendments to its Consumer Privacy Act
New York – Established registration requirements for data brokers
Oregon – Created a data broker notification and registration framework
Montana – Added data broker registration provisions to its privacy law

The trend is clear: states are recognizing that data brokers operate with minimal oversight, and registration laws are the first step toward accountability.

How Registration Laws Differ from Consumer Privacy Laws

It's important to distinguish between data broker registration laws and broader consumer privacy legislation. The CCPA and similar laws give consumers rights like access, deletion, and opt-out capabilities. Registration laws, by contrast, focus on requiring data brokers themselves to register and comply with specific operational requirements.

These laws often include:

Mandatory registration with state authorities
Annual renewal requirements
Public or semi-public registries
Notification obligations when breaches occur
Restrictions on selling sensitive personal information
Requirements to honor consumer deletion requests

Who is Covered and What's Protected

Understanding the scope of data broker registration laws is crucial for both consumers and the companies that handle data.

Defining "Data Broker"

Each state's law defines data brokers slightly differently, but the general definition includes any entity that:

Collects personal information about consumers
Does not have a direct relationship with those consumers
Sells, licenses, or shares that information with third parties
Derives significant revenue from these activities

Importantly, many laws exclude certain entities from the definition of data broker:

Financial institutions regulated by banking authorities
Insurance companies
Healthcare providers (generally)
Employers collecting employee data
Nonprofits
Government agencies
Companies collecting data solely for debt collection

What Types of Personal Information Are Protected

Data broker registration laws typically protect a broad range of personal information, including:

Names and contact information
Social Security numbers
Financial account information
Biometric data
Medical and health information
Browsing history and online activity
Location data
Educational records
Employment history
Criminal history

Some states extend protection to "sensitive personal information," which includes categories like:

Social Security numbers
Financial account credentials
Precise geolocation data
Biometric identifiers
Health information
Genetic information

State-by-State Breakdown

#### California Data Broker Registry

California's approach is particularly comprehensive. Under the California Consumer Privacy Act (CCPA) and subsequent amendments, data brokers must:

Register with the California Attorney General
Maintain a current registration
Notify consumers about their data collection practices
Provide a mechanism for consumers to submit deletion requests
Honor those deletion requests within 45 days

The California data broker registry is publicly searchable, allowing consumers to identify which companies hold their information.

#### Vermont Data Broker Requirements

Vermont's data broker law, the first of its kind, requires:

Registration with the Vermont Attorney General before conducting business
Annual registration renewal
Notification to Vermont residents if their data is breached
Compliance with security standards
Restrictions on selling certain sensitive data categories

#### New York Data Broker Law

New York's regulations require data brokers to:

Register with the New York Department of State
Provide clear privacy policies
Implement reasonable security measures
Notify consumers of their data collection practices
Maintain records of data sources and recipients

#### Other States with Registration Requirements

Oregon, Montana, and other states have implemented variations of these requirements. Some states are still developing their regulatory frameworks, so the landscape continues to evolve.

Step-by-Step Process for Data Brokers

If you operate a data broker business, or you're responsible for compliance at such a company, here's what the registration process typically involves:

Step 1: Determine if Your Company Qualifies as a Data Broker

Review your business model against your state's definition. Ask yourself:

Do you collect personal information about individuals?
Do you lack a direct relationship with those individuals?
Do you sell, license, or share that data with third parties?
Does this activity generate significant revenue?

If you answered "yes" to all four questions, you likely qualify as a data broker and must register.

Step 2: Gather Required Documentation

Before registering, compile:

Your company's legal name and any aliases
Principal business address
Contact information for a designated compliance officer
Description of the data categories you collect
List of data sources
List of data recipients or categories of recipients
Privacy policy documentation
Security practices documentation

Step 3: Complete the Registration Application

Each state's application process differs, but generally you'll need to:

Visit your state's designated registration portal (usually the Attorney General's office)
Create an account with your company information
Complete all required fields in the application
Upload supporting documentation
Pay any applicable registration fees
Submit for review

Step 4: Pay Registration Fees

Most states charge annual registration fees for data brokers. These typically range from $100 to $500 annually, though some states may charge more for larger operations.

Step 5: Maintain Compliance

Once registered, you must:

Renew registration annually
Update information if your business practices change
Respond to consumer deletion requests
Maintain security standards
Report data breaches as required
Keep detailed records of compliance efforts

Common Pitfalls and How to Avoid Them

Pitfall 1: Misclassifying Your Business

Many companies mistakenly believe they're exempt from data broker registration because they have some direct relationship with consumers or because they fall into an excluded category.

How to avoid it: Carefully review your state's specific exemptions. When in doubt, consult with a privacy attorney. The cost of legal advice is far less than penalties for non-compliance.

Pitfall 2: Ignoring State-Specific Requirements

Data broker laws vary significantly by state. What's required in California may differ substantially from Vermont requirements.

How to avoid it: If you operate in multiple states, create a compliance matrix documenting each state's specific requirements. Assign responsibility for monitoring changes in each jurisdiction.

Pitfall 3: Failing to Respond to Consumer Deletion Requests

Many data brokers underestimate the volume of deletion requests they'll receive and don't establish adequate systems to handle them.

How to avoid it: Implement automated systems for receiving, tracking, and processing deletion requests. Set internal deadlines shorter than the state-mandated timeframes to build in a buffer. Document all requests and responses.

Pitfall 4: Inadequate Data Security

Registration laws often require data brokers to maintain reasonable security measures. Breaches can result in significant penalties and reputational damage.

How to avoid it: Conduct regular security audits, encrypt sensitive data, implement access controls, and maintain incident response plans. Consider cyber liability insurance.

Pitfall 5: Not Updating Registration Information

Business information changes. If you move offices, change your compliance officer, or modify your data practices, you must update your registration.

How to avoid it: Set calendar reminders for annual renewal dates. Assign someone to monitor regulatory changes and update registrations accordingly.

Templates and Resources

Data Broker Privacy Policy Template

A comprehensive privacy policy should include:

Clear identification of what data you collect
Explanation of how data is used
Description of who receives data
Consumer rights and how to exercise them
Data retention and deletion practices
Security measures employed
Breach notification procedures
Contact information for privacy inquiries

Consumer Deletion Request Response Template

When responding to deletion requests:

Acknowledge receipt within 5 business days
Confirm the consumer's identity
Explain your data retention schedule
Provide timeline for deletion
Confirm completion with written notice

Compliance Checklist for Multi-State Operations

[ ] Reviewed each state's data broker definition
[ ] Documented business classification in each state
[ ] Identified applicable exemptions
[ ] Registered in required states
[ ] Paid all applicable fees
[ ] Established deletion request procedures
[ ] Implemented security measures
[ ] Created breach notification plan
[ ] Assigned compliance responsibility
[ ] Set calendar reminders for renewals

When to Seek Professional Help

Situations Requiring Legal Counsel

Consider consulting a privacy attorney if:

Your company operates in multiple states with different requirements
You're uncertain whether you qualify as a data broker
You've received a government inquiry or complaint
You've experienced a data breach
You need to update your business practices for compliance
You want to challenge a regulatory interpretation

Finding the Right Privacy Professional

Look for attorneys or consultants with:

Specific experience with data broker laws
Knowledge of your state's requirements
Track record helping similar companies
Understanding of data security practices
Ability to explain complex concepts clearly

Frequently Asked Questions

What happens if a data broker fails to register?

Penalties vary by state but typically include civil fines, cease-and-desist orders, and potential legal action. In some states, consumers may have private rights of action. The longer non-compliance continues, the more significant the exposure becomes.

Can consumers use data broker registration laws to remove their information?

Yes. Data broker registration laws generally require registered data brokers to honor consumer deletion requests. However, the process and timeline vary by state. Some consumers use services like GhostMyData to automate this process across multiple data brokers simultaneously.

Are there federal data broker registration requirements?

Currently, there is no federal data broker registration law. However, the Federal Trade Commission (FTC) has proposed regulations that would establish national standards. Until federal legislation passes, state laws remain the primary regulatory framework.

How do data broker registration laws relate to GDPR?

While GDPR applies to European residents' data, many U.S. data brokers operate internationally. If you collect data from EU residents, you must comply with GDPR regardless of state registration requirements. These are separate but complementary regulatory frameworks.

How often do registration requirements change?

State privacy laws are evolving rapidly. New states are implementing requirements, and existing states are strengthening their laws. It's crucial to monitor regulatory updates at least annually and adjust compliance practices accordingly.

Take Control of Your Data Today

Data broker registration laws represent real progress toward privacy accountability, but they only work if enforced and if consumers actively exercise their rights. Understanding which states require registration is the first step, but taking action to remove your information from data brokers is equally important.

While data broker registration laws require companies to honor deletion requests, the process can be time-consuming and complicated. That's where automated solutions come in. GhostMyData simplifies the process by identifying which data brokers hold your information and submitting removal requests on your behalf.

Start with a free scan to see which data brokers have your personal information. Then let GhostMyData handle the removal process automatically. Visit ghostmydata.com to learn more about how our service protects your privacy in an increasingly data-driven world.

Your data is yours. Take it back today.