Just how evil is Facebook?
A handful of tech startups are using social data to determine the risk of lending to people who have a difficult time accessing credit. Traditional lenders rely heavily on credit scores like FICO, which look at payments history. They typically steer clear of the millions of people who don't have credit scores.
But some financial lending companies have found that social connections can be a good indicator of a person's creditworthiness.
One such company, Lenddo, determines if you're friends on Facebook (FB) with someone who was late paying back a loan to Lenddo. If so, that's bad news for you. It's even worse news if the delinquent friend is someone you frequently interact with.
A German company called Kreditech says that it uses up to 8,000 data points when assessing an application for a loan.
In addition to data from Facebook, eBay or Amazon (AMZN) accounts.
Now you might think that this is a bit scary. Facebook, OTOH, looked at it as an opportunity.
Renowned personal-data-gatherer Facebook now has a new way of gathering more personal data of you and your friends. On Tuesday, the company secured a patent that would allow creditors to assess your creditworthiness based on the credit ratings of the people in your social network.
..The Federal Trade Commission prohibits creditors from discriminating against borrowers’ age, sex, race, color, religion, nationality, marital status, and other personal information.
What the FTC doesn't prohibit discrimination against is class.
That was three years ago. Quartz was quick to say, "Before anyone cries foul, it’s quite likely that Facebook never actually makes use of this patent."
Well isn't that precious.
Last week Facebook announced a new feature.
Facebook's patent plan for "Socioeconomic Group Classification Based on User Features" uses different data sources and qualifiers to determine whether a user is "working class," "middle class," or "upper class." It uses things like a user's home ownership status, education, number of gadgets owned, and how much they use the internet, among other factors. If you have one gadget and don't use the internet much, in Facebook's eyes you're probably a poor person.
Facebook's application says the algorithm is intended for use by "third parties to increase awareness about products or services to online system users." Examples given include corporations and charities.
Leave it to Facebook to race ahead of Black Mirror. In light of Facebook's recent announcement to focus on more "concrete local issues" it's not too hard to imagine how this could be used to keep working class renters out of a particular neighborhood, to facilitate predatory lending, or make sure that lower classes don't see your dating service ads.
I've said it before and I'll say it again: classism is the last socially acceptable prejudice in America.