On July 22nd Facebook filed a new patent for a product the company could sell to creditors to analyze someone’s creditworthiness based on the social network they use. Using this new tool banks, your local Don and other loan providers can review your social media network to determine what interest rate you should receive, or if you should get a loan at all.
It was recently noted that if you have a social network with a large following/friendslist of people with poor credit ratings then you could be denied access to traditional lenders. That’s right, you better start trimming that lengthy list of people-you-met-once-but-are-now-friends you have on Facebook.
With the patent on recently reported on, there is still no indication on how the majority of Facebook users will react to the knowledge that the person you spoke a single word to at last night’s party, but whom you decided to add on Facebook, can now affect your credit rating. One outcome could be that Facebook users demand that the company not allow their social network to be used for credit analysis. Another possible outcome is that Facebook users will be more hesitant to friend people who they perceive as having bad credit. Of course there’s also the fact that users with a bad credit rating could friend people with good credit ratings in a bid to increase their overall rating, which though seemingly random, is not impossible.
The exact wording of the patent is as follows:
“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.”
This is another reminder of the fact that while social media companies might paint smiley faces over themselves and say that they mean to “connect people”, it really boils down to them selling your data to third parties to do business. Facebook already sells our personal details to advertisers so this is not much of a surprise. I think I’ll spend my weekend purging my friends list just in case I need to pull out that loan for a private island.
