As if Facebook didn’t control enough of your life, a recent patent highlights the depths of the social network’s sway. According to a recent report from U.K.’s The Independent, Facebook has the capability to let lenders or credit agencies review the financial habits of your friends and judge your own creditworthiness based on their actions.
The patent, purchased by Facebook from Friendster in 2010, details a method by which “the lender examines the credit ratings of members of the individual’s social network” and judges the borrower based on their Facebook friend’s own financial responsibility. If they like what they see, “the lender continues to process the loan application. Otherwise, the loan application is rejected.”
To be clear, this is not yet a stated service Facebook is offering. The patent simply details the company’s ability to provide such a resource. Should Facebook ever utilize this patent, however, it would represent a merging of two increasingly invasive aspects of public life. Facebook has a rather famous disdain for user privacy—profiting as it does from targeted ads created from users’ data—and will employ said information in any way it can to make money. Credit agencies are a cabal wrapped in secrecy and shrouded in mystery—with a thirst for consumer information that might only be surpassed by Facebook.
If Facebook works with banks and creditors to help them assess an individual’s worthiness of a loan, it would be a match made in data-mining heaven. The Big Three credit agencies—Equifax, Experian, and Transunion—collect a wide array of data on individuals to calculate credit ratings. While collecting information about overdue or paid accounts, credit agencies also gather information about your salary, your employment history, and how often your credit score is checked.
Facebook has the capability to let lenders or credit agencies review the financial habits of your friends and judge your own creditworthiness based on their actions.
This is exactly what you’ve come to expect from the credit industry, but those agencies also collect a slew of information most Americans likely aren’t aware could hurt their chances of getting a loan. Getting divorced, for example, can drag down your credit score. Turning in a rental car late could also hurt you, as could late library books. How much these individual factors can affect your overall FICO score is a mystery, as the formulas used by credit agencies are still a trade secret.
As increasing amounts of our lives have become public through our digital personas, lenders and credit agencies have taken to snooping on our public profiles for any scrap of information they deem necessary. According to a Wall Street Journal report, lenders are prone to checking LinkedIn for accurate employment information—or even the eBay page of a small business to scan for poor reviews. Germany’s largest credit agency already mines Facebook for data.
What is particularly worrying about the patent, though, is the way it could allow lenders to judge you based on your friends’ financial history. Not even your actual friends, but your Facebook friends. The average Facebook user has 200 friends and has never even met seven percent of them; another three percent they’ve only interacted with in real life once. The idea that your creditworthiness could be judged based on a chance encounter with a stranger at a book club or the grocery store speaks to the insatiable hunger creditors have for any information, but also the level of control Facebook could employ to its own gain.
For years now we’ve discussed the dangers of the “surveillance economy.” While you might realize Facebook, Google, and Amazon are collecting your data, many aspects of the 21st century economy rely on the constant harvesting of your data through all possible means. Retailers and banks, as well as insurance companies and even your landlord, rely on massive databases to provide their services and assess your culpability for different versions of those services—be they coupons, credit card offers, or rental agreements.
We volunteer for much of this data collection in the same way we knowingly provide Facebook with the data it uses to sell ads and improve its site. We’ve created a privatized Big Brother in nearly every sector of our economy, and that data is going to be valuable to organizations that could harshly affect your life.
When Edward Snowden reported that the National Security Agency had collected the telephone and Internet records of hundreds of millions of Americans, a frequent refrain from supporters of such anti-terror tactics was that “if you have nothing to hide, you have nothing to fear.” Digital designer Daniel Sieradski created the Twitter account @_nothingtohide to catalog posts from people who claim to be above the interest of government surveillance through lawful living.
Getting divorced can drag down your credit score. Turning in a rental car late could also hurt you, as could late library books.
This kind of thinking is wrong for several reasons. As Reason’s Scott Shackford points out, believing that surveillance only matters if you personally have something to hide from authorities is “a fundamentally selfish declaration.” Your habits online, and what the government can learn from it, might expose your sister’s habit of buying weed from her neighbor or your uncle’s illegal use of your aunt’s accessible parking pass. If that sounds like small fish for federal surveillance to fry, remember that local police are using many of the same tools employed by the NSA.
This brings us to the fundamental danger of Facebook helping lenders determine who does and does not get a loan. Even if your own financial habits are squeaky clean, Facebook has the capability to let your bank judge you based on the habits of a person you might have never actually met. Whether you have anything to hide is no longer the point. Banks could search anyone who knows you well enough to find you on Facebook—like high school friends or work buddies—for any damaging financial history and use it restrict your ability to get a loan or build credit.
Because we can’t actually know the factors that determine your credit score, it’s impossible for anyone to know if they have something to hide at all.
Gillian Branstetter is a social commentator with a focus on the intersection of technology, security, and politics. Her work has appeared in the Washington Post, Business Insider, Salon, the Week, and xoJane. She attended Pennsylvania State University. Follow her on Twitter @GillBranstetter.
Illustration by Max Fleishman