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How Deadbeat Facebook Friends and Using ALL-CAPS Can Lower Your Credit Score
McGruber writes "CNN has the news that some financial lending companies claim that Facebook social connections can be a good indicator of a person's creditworthiness. One company determines if you are friends with someone who was late paying back a loan; if so, that is bad news for you. It is even worse news if the delinquent friend is someone you frequently interact with. Another company gathers information from the manner in which a customer fills out the online loan application. The chances of getting a loan improve if you spend time reading information about the loan on their website. Conversely, if you fill out the application typing in all-caps (or with no caps), you are knocked down a couple pegs in that company's eyes. A third lender requires that small business borrowers grant them access to the borrowers' PayPal, eBay and other online payment accounts (what could possibly go wrong with that?), thereby disclosing real-time sales and delivery information."
I keep some of my savings at Lending Club, which originally started out as a Facebook-based microlending platform -- the idea was that if you knew the people you were lending to, or at least understood their social graph, that you'd make better lending decisions. They dropped the concept a few years ago, my guess is that it didn't scale and there were practical difficulties. (I could see issues arising from sockpuppetry and slander, among other things...)
They do still loan to individuals, and when you lend you read their application, you can see where they live, their FICO, and what they plan to do with the money. And, guilty as charged, I never lend to people to do their application in ALL CAPS :)
Don't blame me, I voted for Baltar.
"Easy. How would they know who my facebook friends are?"
They _buy_ that info from FB, remember, you are the product, they are the client.
I don't know why I'm surprised at how little consumer protection there is in the US any more. In the UK credit agencies are regulated and can't just use any information they can lay their hands on. You can add your own notes or get it corrected too.
One thing that is specifically forbidden to be used is who you associate with or who you are related to. That's how we "dealt with it".
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
That's always the pain of statistical models: someone's an exception.
And in the case where someone is an exception and can prove that their associations are the cause of being denied a loan or a job or in any way effecting an individual's credit, here comes the lawsuit. You cannot legally be denied employment and your creditworthiness cannot be effected by your associations. This would have far-reaching discriminatory consequences with regard to race, religion, financial 'class', etc. and ultimately force people to cut off others in their life who were not 'reliable'.
Setting this precedent allows a true class-style system to be introduced whereby unless you are in the 'reliable' category, it is almost impossible to become 'reliable' because 'reliable' people won't associate with you or give you jobs. People would potentially be forced to ostracize family or friends from their realm in society for fear of being dubbed 'unreliable'. This sounds eerily like Gattaca except with financial systems instead of genetics (I know that a better reference is Huxley or possibly even McCarthy in some ways but I just watched Gattaca again a few days ago and it is fresh in my mind).