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Facebook has recently obtained a patent that has a variety of use cases. One that has been quite controversial is regarding a technology that can be used when individuals are applying for e-loans. This technology finds the credit scores of people connected to the individual applying for a loan and can take an average of those credit scores to “establish credit worthiness” of the initial applicant. It will be interesting to see if and how online lenders leverage this discriminatory data.
But the technology can also aid in other types of discrimination. Here’s the last use case Facebook describes in the patent: 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. The use of social network contacts as a basis for establishing credit worthiness is questionable; just because some of my friends have bad credit scores doesn’t mean I do. But the technology would likely be valued by some banks to add a new metric to the review process.
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