The short version: Facebook uses the data you give it to request offline information about you from information brokerage firms. There’s a lot of information that FB can gather about you that way, often related to your credit history. While it’s in theory possible to opt-out of that sort of information gathering, Facebook requires that you tell their third-party information providers not to send your data to Facebook, rather than telling Facebook not to request that data about you. It’s in theory possible but:
One of us actually tried to do what Facebook suggests. While writing a book about privacy in 2013, reporter Julia Angwin tried to opt out from as many data brokers as she could. Of the 92 brokers she identified that accepted opt-outs, 65 of them required her to submit a form of identification such as a driver’s license. In the end, she could not remove her data from the majority of providers
The full story at ProPublica is great. You should read it.