/ Money, Technology

What if your Facebook profile could influence credit decisions?

It’s been reported that Germany’s biggest credit agency is planning to trawl its customers’ social network accounts to gather information to help them credit check and identify ‘opportunities’. But could it happen here?

Surely it can’t be right that firms such as Schufa in Germany will be able to use information posted on social networks as part of the checks they run on people who want to purchase goods or services from other companies? It’s certainly not something I’d willingly consent to.

I think we’re potentially one step away from UK firms following suit. And I wouldn’t be impressed if it led to firms developing strategies to use our social networking information for their own means. That’s not what I signed up for.

Will the UK follow suit?

Should Schufa’s lead be followed in the UK, it could cause all sorts of privacy law problems. While you may agree that consumers generally expect their information to be shared between banks and credit reference agencies, it’s a different proposition altogether when you find out that your Facebook profile could be used to influence decisions on whether you’ll be offered credit or not.

Your photos, posts, likes and dislikes are arguably unreliable, irrelevant and definitely not uploaded with the expectation of such uses. On my reading of the Data Protection Act, I’d say this proposition is ‘prejudicial to the rights and freedoms or legitimate interests of the individual’. Admittedly, it’s difficult to provide a definitive answer, given the fact that the law on this point is not crystal clear.

Big Brother is bothering you

Germany’s consumer protection minister, Ilse Aigner, is so concerned that she has said the practices being planned by Schufa are akin to something you’d expect from a Big Brother state. On the other hand, businesses will probably argue that the information they’re sifting though is publicly available, so they’re doing nothing wrong.

But this seems to be an argument based on the fact that privacy laws are always playing catch-up to fast developing technologies. It seems we may live in an age of surveillance, which might be leading us to develop paranoid tendencies. But until it’s made clear how companies can use our information and what they can use it for, maybe we should all put a bit more thought into the information we post online and the privacy controls we use.

John Symons says:
12 June 2012

Frankly if you put claims of reckless spending and borrowing on a social network you are a fool. if potential employers now trawl social networks, why would not potential lenders?

Good point, I don’t think many people do put that sort of info up. But if banks are allowed to trawl your info, it will be automated rather than just people reading your status “Oh no, defaulted on a loan, oops!”

I think they’re thinking more of, for example, crawling peripheral information such as whether you’re in a relationship, whether you change jobs regularly, etc.

Which? Conversation has convinced me that Facebook and its popularity are big issues for modern society. Look at Wikipedia and the page on Facebook criticism has more content than the page on Facebook itself.

It is hardly surprising that companies wanting to be successful will make use of information available online.

Keep on identifying the problems and let everyone know, until Facebook et al. are properly regulated or become unfashionable.

If they covertly use sources which can be either hijacked, wrong or subject to abuse then there are clearly issues. Any decisions need to be transparent and subject to review with clearly ring fenced consent required for information used.

Businesses here have been doing this via clubcards, reward cards, etc, for years now.
How many readers of this forum use microsoft office? Newer versions, ie, office 2010, already feedback information to business, google and hotmail do it, then sell it on for big profits.
Our own government are in the process of changing the law around information to be able to share information on government files with certain businesses.

As for effecting the prices we all pay, we have little control as legislation, successive governments, regulators and enforcement bodies all ignore pleas from the public, who are deemed to be “conspiracy theorists,” for some protection.

Car insurance is no longer priced based upon the car you have, crime in your area, etc. Now we are priced based on the percentage of owners that have had a crash who drive the same car, your job description (manual worker, company director, etc.)
Public are not given clear breakdowns on price, just head office dictats, because the insurance companies have lost pots of money trying to make quick profits in the markets and with pension funds, etc. (Don’t get me started on charging us to pay over 12 months, then giving themselves the fees for doing so!)
Bank charges are based solely on the amount of money the bank lost in the previous financial year, divided by the number of charges they issued, to work out an average price to recover the money, nothing to do with how much the individual actually cost the bank with their account. This is illegal, yet those in power and on the taxpayer gravy train (read: quango regulators) do nothing.
Even supermarket prices are down to demographics, monitoring everything from where we walk in their stores to jobs/property prices in the area of each store, from earnings in any given area of the country to analysing credit/debit cards used to pay for goods in their stores.

This is part of the problem – companies tell us “we never sell your data on to any other companies” – which isn’t strictly true.
Businesses can legally sell on “analysis” of any data they want to collect.
It matters not if this data comes from your credit/debit card, job descriptions, value of homes in the area or how many people bought a packet of andrex on a tuesday afternoon, they sell it to each other, it’s an industry on it’s own and a very profitable one at that!
All social networking information will do is add another string to the bow of business to be used to fire financial arrows at everyone, putting more holes in our pockets for our money to fall through into their troughs.

Legislation/laws do not keep pace with businesses, you are correct.
With governments, regulators, enforcement bodies all funded by businesses and dancing to their tune, there is no impartiality to protect the public.
Where is all our information being stored?
The law used to safeguard us by stopping all our information from being stored on countries without our strict terms of data protection enforcement – the last government changed the law so that banks could move out call centres to places such as India, who still to this day do not have data protection laws matching the UK.
Whilst information is stored abroad, analysis of it can be made and that analysis can be sold on. We can’t even keep businesses in check with our info in the UK, god only knows what they are doing with it when it’s abroad?

The only way to protect yourself from it, as far as it’s possible, is to be as anonymous as possible when online.
Why else do people believe that only real names are facebook’s terms?
Every advert on TV wants you to join a facebook group, for shampoo or fruit drinks?
Supermarkets will match the prices of rivals, providing you enter name address email address, etc. Then people give them all their shopping habit information so they can target prices for maximum profit and make far more back than the offered “£5 off your next shop” or “double card points”

If the government today ordered all UK trading companies to open up and reveal what they are doing with information and which other companies “analysis” of our information is being sold on to/shared with, people would be outraged and rightly so.

The public do not stand a chance.

@frugal ways.
I read your post then I look out at our ‘summer’ weather and am hit by an overwhelming sense of despair, and worse, I know you have only brushed the tip of the iceberg.
I for one do not use Facebook or twitter, I have no interest in ‘social media’ and can find no use for it. I wonder if soon the fact I don’t have a Facebook account will count against me.
Right now if you do not have a debit or credit card and mobile phone there are areas you cannot park your car [pay by phone]. So you are penalised for not ‘opting in’, is this the next step either comply with general trends or be excluded.

Well said, m.

I am not opposed to change but sometimes change may not be for the better. If I have a problem I want to contact a company by email, which allows me to keep a copy of correspondence and attach photos. I don’t want to use a web-based form. I certainly don’t want to use Twitter, so next time Which? promotes it I might be rather rude. Many smartphones need to be charged daily, so someone with a flat battery would also be unable to park in areas where payment is by phone. Apple produces some fantastic products but an iPhone is little better than a Fisher Price toy in my opinion, simply because the user cannot pop in a fresh battery. People are trying to phase out the cheque book when there are situations when it is the only practical alternative.

I want to see Facebook etc. fail. I’m not worried about Twitter, but I certainly don’t want to be forced to use it.

Phil says:
12 June 2012

Surely any information posted on Facebook is in the public domain so why shouldn’t banks use it? The only privacy issues come when people choose to put that information online in the first place.

James Benamor says:
12 June 2012

I think you’re missing the point here. Unlike most countries the UK does not have a Social Security number or ID card system. Because of that ID fraud is a huge problem for lenders as professional fraudsters are able to ‘manufacture’ identities easily and routinely defraud banks and lenders of hundreds of millions of pounds. Like any inefficiency in any market this is ultimately paid for by good customers.

Stealing someone’s credit file may turn out to be much easier than manufacturing a Facebook profile with years of posting history and hundreds of friends with their own genuine profiles and freind networks.

If the implementation of social network mining was optional and opting in meant you were separating yourself from fraudsters and so didn’t have to pay the premium currently paid by ‘sub prime’ borrowers would everyone still think it was a bad idea?

m. – You put it far better than I (and in fewer words!) could.
The prices a business charges its customers starts at a floor limit, of their own basic costs plus inflation rises.
The minority will pay this price, the business know this with our information.
No landline phone – add 5% on
No credit history, living with parents, etc – add 10% on
Renting instead of a home owner – add 10% on
Falling under a manual worker catagory – add 3% on
And so it goes on, penalising people financially for not having things, which is the way it will go with social networking, etc.
I remember when paying for goods was the same regardless, whether cheque, credit/debit card, cash etc. If anything smaller outlets gave a discount for cash.
Now the price is affected by payment methods.

I also despair sometimes when I see exactly what Phil posted.
People putting dates of birth, employment details, year of leaving school and naming the school, etc, on their profile, leaving their social accounts unprotected, etc.
Then they click “like” buttons of products and services, feeding information to business, in the hope that they might win a voucher for £10 off.

James, we all know by now from past experiences that what business offer as ideal scenarios are never what happens in reality.
Social network mining already goes on – using internet phones, people are feeding information to companies – in the case of facebook – that are making millions each year.
When was the last time that a business got in touch with you to ask your permission and/or offered you a payment for YOUR information?

A good example I came across only today, with the new iphone.
It will no longer be using google maps, as now they have their own imap?
Their new map system will be “just like google mapping system but will be displayed in 3d!” (There’s the selling point/benefit)
If that’s all it was about then fine, no problem with that, but it’s not is it…
Now the business won’t have to pay a license fee to google to use their service – analysis of data gathered will not be limited by google’s terms and conditions, now they can freely monitor, store and produce reports on the data they now own, selling these on for bigger profits.
Have you seen how difficult it is to block cookies on an internet phone? Could this be one of the reasons why businesses want customers/users to take up using handsets instead of computers for their internet use (in that it is harder for the user to see/block companies taking their information)?

If pictures/posts/updates were being stored on facebook (or any other social network) servers and genuinely was ONLY being used to target advertising to our needs then fine. Once again, we all know this is not the case.
Ownership of pics/posts/opinions/updates transfers to facebook, or which ever forum is used.
It doesn’t stop there, facebook (for example) then hides away that it is also entitling its business model to gather information about your friends list and their updates/posts, etc.
It goes on… now facebook are doing email addresses per account user and blocking accounts that use false or joke names, under the guise of being a more secure service for users (selling a benefit again?) when in fact it cuts out the need for more security checks and validates users prior to mining their information.

Options to protect information are to stop it being viewed, where are the options to stop facebook gathering and using this same data?
There aren’t any, quite the opposite, it’s a condition of using their website that each user gives ownership to them.
How many 15 year olds (for example) do you know that will read all the terms a conds before using facebook (or any other forum)?

Social network data mining won’t “stop fraudsters” even if it’s optional, that may be what banks and facebook promote in public to justify their gathering, but in reality our information will be used very differently.
I recall the selling of the benefits by banks and government regarding chip and pin for card payments.
Customers paid for the system, pay for the upkeep, pay for the staffing, pay for the technology, yet card fraud has increased.
I haven’t heard of a single business saying, oh well we paid out XX amount less last year due to reduced fraud, so we can now cut our prices by XX amount/percent, I doubt I ever will.

Anonymity online is a neccessity, even then it can only limit data taken and distort it so (one day) making it an unreliable option when using it to increase prices.

It’s not just social network mining, its also price comparison site data mining and pretty much anything where you put your details in to buy a product online.

Recent Apple update for ts & cs asked some very personal questions, questions that they have no right to ask in order to use a blooming iPad. If you don’t answer them you cannot use the software, unbelievable!

So all in all, how many more reasons do you need to not have a facebook/linkedin/bebo etc account?

I have a great credit rating, and so have nothing to hide, I just cannot stand the surreptitious policing of the internet via marketing mediums.

I wouldn’t want to deposit my money in a bank with lending policies that depended on information that borrowers produced themselves.

“Wikifinance” perhaps?

Phil says:
14 June 2012

Well that’s one reason we got into this mess in the first place.

Liar Mortgage any one?