Money lenders should be banned from using social media profile data, says MEP Sinn Féin
Lenders should be banned from using information found on social media profiles to decide applicants’ creditworthiness, Sinn Féin MEP Chris MacManus said.
Mr MacManus said he would raise the issue with the Central Bank and the European Commission following the release earlier this month of a report by an EU-funded non-governmental organization, Finance Watch.
The report is taken from the website of Provident Personal Credit, a UK-owned money lender that operates in the Republic and is regulated by the Central Bank. Provident’s website states that it sometimes searches for “comments and opinions” made public on social media sites and may sometimes “match the information on those sites with the data we hold to undertake behavioral analysis and help with the credit decision ”.
Finance Watch, a Brussels-based coordination group of nonprofit members and experts set up in the wake of the financial crisis, highlighted this as an example of the ‘problematic’ ways in which credit ratings are carried out, which may include “irrelevant” data. such as “information indicating whether the consumer is politically involved or not”.
‘Off topic’
“Not only is this type of data irrelevant in determining a consumer’s ability to afford a loan, it can also lead to credit denial (and therefore financial exclusion) based on discrimination” , concludes his report.
Mr MacManus said it was “shocking” that a lender could admit to using social media in this way.
“Unfortunately, as the report points out, a lack of detail in EU legislation in this area means they can get away with it.”
The practice “raises many data protection issues” as well as a “fundamental ethical issue,” MacManus added.
“Relying on social media can and will lead to bad credit decisions and consequent hardship for borrowers. “