If you publicise your extravagant social activities on Facebook and other social media you run the risk of it being held against you.
Not just in your career (about which I have posted previously elsewhere) but in getting a mortgage or a loan .
A new company called Big Data Scoring is offering its services to banks and other financial organisations and says there has been a lot of interest.
It uses models and algorithms to predict the likelihood you will default on a loan based on thousands of data points including social media, blogs, web pages you have visited and information available on google.
Lenders ask permission from Facebook account holders to access the information as part of the loan application.”This is not as stalkerish as it sounds.We don’t look at the photographs or read people’s messages. We focus on the overall nature of the profile – how active people are on Facebook, what sort of activity is it, what do they like and what it says about their personalities. (During R & D) we have spotted important aspects that help to predict one’s credit behaviour”
The company CEO gives an example of someone who is extremely active on Facebook even in working hours, someone who responds to every ad campaign, someone who is forever updating their relationships status on the wall, or is playing games all day.
Compare that with someone who uses social media to keep in touch with old friends, who only logs in after work and not much at the weekend, and who knows responding to ad campaigns only leads to spam mail. Which is the more trustworthy person?
They say they never give the lenders an absolute statement about someone’s credit rating but just give a probability of whether or not the person will default. If you are one of the 25% of 18-29 year olds who’ve been turned down for a loan then that’s just a question of semantics.
Another credit scoring company is Experian which doesn’t use big data relying instead on the electoral register, public government records, and transactions from financial companies to predict how people will behave with regard to payments and debts.
They think that the data exhaust you leave behind in your transactions with organisations and their customer service departments are more relevant than your social media footprint.
However Experian concedes that social media may be useful in emerging markets where there is little financial information or credit history scoring is not available about a person.
Other companies such as those helping new start-ups or self-employed people say their lending criteria will be based on social media accounts one even claiming that you can tell a lot about a person (and presumably their trustworthiness) from the clothes they wear in their online photographs.
So you have been warned!
Facebook and social media have been used to catch speeding motorists in India, draft dodgers in Israel, fraudulent insurance claims, and are scrutinised by divorce lawyers in America and the UK.
On the positive side insurance companies which trawl social media sites to snoop on customers could be facing a crackdown by the City watchdog. The Financial Conduct Authority (FCA) has been examining how insurers use information gathered from the internet to set premiums.
Social meda sites including Linkedin and supermarket loyalty schemes generate reams of personal information which can be used by institutions to assess risk but consumers are worried about it being used in this way. An investigation by the FCA could lead to tougher rules being introduced this year.
Could companies use your supermarket loyalty card to assess your lifestyle – all that booze you keep buying – and your life insurance liability? The Association of British Insurers says big data could make insurance work better for customers and they treat personal data very sensitively.
As I said before – you have been warned!