Facebook Wants to Judge Your Credit Worthiness By the Company You Keep

I don’t know about you, but I have friends of all income levels. We do our best to be honest about what we can and can’t afford, and help each other out when we need it. I have no idea what any of my friends’ credit scores are, and the only reason they know how much money I earn (and how much debt I have) is because I share all of that stuff with readers like you.

But Facebook seems to think that my credit worthiness is in some way related to the company I keep. From VentureBeat:

Facebook has been granted an updated patent from the U.S. Patent office on a technology that can help lenders discriminate against certain borrowers based on the borrower’s social network connections.

Wait, what?

Here’s the last use case Facebook describes in the patent:

In a fourth embodiment of the invention, the service provider is a lender. When an individual applies for a loan, the lender examines the credit ratings of members of the individual’s social network who are connected to the individual through authorized nodes. If the average credit rating of these members is at least a minimum credit score, the lender continues to process the loan application. Otherwise, the loan application is rejected.

Or, as Susie Cagle explains in Pacific Standard:

In short: You could be denied a loan simply because your friends have defaulted on theirs. It’s the kind of digital redlining that critics of “big data” collection have been warning of for years. It could make Facebook a lot of money, and it could make the Web even less safe for poor people. And it could be just the beginning.

And in case that weren’t clear, Cagle literally illustrates the problem:

Big social data stands to make credit reporting even more discriminatory. Me @PacificStand http://www.psmag.com/nature-and-technology/mo-friends-mo-problems-might-have-to-defriend-joey-with-the-jet-ski-bankruptcy … pic.twitter.com/DDUMNTiXru

 — @susie_c

As Cagle notes, the other big problem with this idea is that we are “friends” with a lot of different people on Facebook: “Our networks are clogged with exes, old co-workers, relatives permanently set to mute, strangers and catfish we’ve never met at all.”

Sure, Facebook probably has a way to figure out which of our “friends” are true friends — after all, they can predict which of our friends we’re going to date next — and they might even be able to figure out which of our friends are most likely to loan us money when we’re in a bind. (It’s no coincidence that Kickstarter, Indiegogo, and GoFundMe all offer Facebook integration.)

But we’re also individuals. We make financial decisions based on our needs in the moment, not based on what our friends do. On top of that, our financial situations change as our lives change. Just because one of our friends has a good credit score now doesn’t mean that same friend couldn’t experience a credit-ruining job loss or medical emergency. (Pause to touch wood or whatever you do as a ward against misfortune.)

Do you think Facebook will go ahead with this plan? And if it does, will it change how you interact with your Facebook friends?

Support The Billfold

The Billfold continues to exist thanks to support from our readers. Help us continue to do our work by making a monthly pledge on Patreon or a one-time-only contribution through PayPal.