Facebook, the website everyone and their sister, brother, cousin, uncle, and friends you didn't even know you had is a member of just secured a patent on Tuesday that could help filter spam and offensive content and improve searches. Isn't that great? Less spam and no more nude pics, Obama monkey memes, and tea-billy racist outbursts, but there's more. A lot more and it's not good. The technology could also allow lenders to use a borrower's social network to determine whether he or she is a good credit risk. Let that sink in.
Got that? Your Facebook friends and their spending habits, credit rating, behavior - hell, maybe even their character, could determine whether or not you get a loan and presumably how much interest is going to be applied to that loan.
Here's how it would work, according to CNN Money: "'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,' the patent states."
The patent was uncovered by Mikhail Avady, founder of SmartUp, a legal technology company in Atlanta. Fortune, CNN, TNW News, and VB all say they reached out to Facebook for comment, but none have heard back, according to the articles.
I don't know about you, but I find this terrifying. The idea of judging someone by the company they keep, particularly on social media, is not only unfair, it's a sure fire way to put borrowers into high interest loans and potentially ruin millions of people's finances.
Since Wall Street and the big banks have not kept a low profile of how far they are willing to go to screw people, it's pretty fair to speculate that they will not err on the side of the borrower. It's more likely that they will use all information available to them to determine a borrower as high risk and jack the interest rates as a result.
I have some personal experience with this kind of "degrees of separation" judgment. At the beginning of the financial crisis in 2009 I was featured in a story about mortgages and underwater loans in the Huffington Post. Shortly after that I had the opportunity to contribute to the site as a blogger. I wrote about Wall Street greed and bank misdeeds - many of my posts were featured on the front pages of the site. I started a website called shamethebanks.org, have had an admin roll on the Move Your Money Facebook page, and went to DC to lobby for financial reform. I have since ventured into writing about politics. It's important to note that bloggers aren't paid on Huffington Post as it's a tradeoff -- we get exposure. Sometimes a lot of exposure, which can hopefully lead to other things. But I'm not writing about kittens, home improvement or sex toys and the current political climate is contentious at best. People tend to take their politics personally and not only have I been turned down for work after a simple Google search, but close members of my family have as well. Let's face it, "Zombeck" isn't the most common name.
I wrote about one incident in particular when I reached out to a good friend of mine who's played a significant role as a mentor to me over the last few years and was invaluable when I decided to start a business developing websites for attorneys, advocates, and businesses. She's a volunteer at SCORE, "a nonprofit association dedicated to helping small businesses get off the ground, grow and achieve their goals through education and mentorship." They are sponsored, in part, by the U.S. Small Business Administration (SBA), and have a substantial network of volunteers they claim provide advice and guidance to entrepreneurs and startups. Since SCORE has a vast network of professionals, she offered to reach out to a few who had worked in publishing and print on my behalf.
The variety of articles and topics was made pretty clear to whomever my mentor reached out to and it came as a bit of a surprise to the both of us when one of the responses she received was, "Sorry, but Zombeck is going to have to pursue his leftwing agenda without my help." A myopic view from a guy who isn't hiring, but purportedly helps people find work. I would hate to be wearing my Elizabeth Warren "Trickle Down Doesn't" t-shirt if this guy was passing out the life jackets on a ship.
And yes, I've been unusually public with my views. One could argue that I asked for it and would have been better off keeping my mouth shut and continuing to work quietly in the tech field, but I didn't. I can always hope that the GOP doesn't succeed in raising the retirement age and extending my time as a statistic among the middle aged/geriatric working poor.
The prospect of lenders having access to social accounts and the data behind that is terrifying because it opens every Facebook member up to that very prospect. Sure, the Equal Credit Opportunity Act strictly regulates what criteria creditors can use when deciding on a loan -- things like income, expenses, debts and credit history determine creditworthiness, but weren't mortgages and interest rates highly regulated too? Big banks, and for that matter, big business, have proven in incidents too numerous to count that they care little for regulations or laws. If they're given the opportunity to tilt the wheel in their favor, there's very little to stop them.
It's only a matter of time before this technology is made available and used by lenders, human resource departments, and schools to determine the moral character of an applicant based on an algorithm -- an algorithm that can be tweaked and adjusted to suit the user's needs, social views, political affiliations, etc.
How clean is your list of your friends? Any questionable characters in there? My wall and feed is filled with recovered alcoholics who have changed their lives, foreclosure victims who have fought to keep their homes, left leaning political junkies, and tea bagger memes we find funny, shocking, and obscene. We discuss and comment on low wages, campaign finance, Planned Parenthood, women's health, abortion rights, civil rights, and voter rights, to name a few. Is an algorithm going to get the subtle nuance of that conversation or simply label those people trouble makers, deadbeats, and losers? If Jesus Christ was on Facebook he'd be screwed and living under a bridge based on this technology.
Why am I terrified? Because the prospect and potential that this represents means a world without discussion and without ideas. It means a world in which we have to be careful of what we say for fear of not getting that loan, job, or education. I've experienced it because I chose to expose myself to it, but I have not yet been judged based on someone that I've never met in person -- much less had a professional relationship with -- that I'm simply connected to on social media. So yes, the prospect of that being a real possibility does terrify me.