Facebook's New Plan: Help Banks Figure Out How Poor You Are So They Can Deny You Loans

Facebook's New Plan: Help Banks Figure Out How Poor You Are So They Can Deny You Loans
Flickr
Flickr

If you and your Facebook friends are poor, good luck getting approved for a loan.

Facebook has registered a patent for a system that would let banks and lenders screen your social network before deciding whether or not you're approved for a loan. If your Facebook friends' average credit scores don't make the cut, the bank can reject you. The patent is worded in clear, terrifying language that speaks for itself:

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.

It's very literally guilt by association, allowing banks and lenders to profile you by the status of your loved ones.

Source: Eric Risberg/AP
Source: Eric Risberg/AP

Though a credit score isn't necessarily a reflection of your wealth, it can serve as a rough guideline for who has a reliable, managed income and who has had to lean on credit in trying times. A line of credit is sometimes a lifeline, either for starting a new business or escaping a temporary hardship. 

Profiling people for being in social circles where low credit scores are likely could cut off someone's chances of finding financial relief. In effect, it's a device that isolates the poor and keeps them poor.

A bold new era for discrimination: In the United States, it's illegal to deny someone a loan based on traditional identifiers like race or gender — the kinds of things people usually use to discriminate. But these laws were made before Facebook was able to peer into your social graph and learn when, where and how long you've known your friends and acquaintances.

The fitness-tracking tech company Fitbit said in 2014 that the fastest growing part of their business is helping employers monitor the health of their employees. Once insurers show interest in this information, you can bet they'll be making a few rejections of their own. And if a group insurance plan that affects every employee depends on measurable, real-time data for the fitness of its employees, how will that affect the hiring process?

Even if Facebook never makes good on this patent, it's a glaring reminder of how Silicon Valley tech companies turn people into quantifiable game pieces to be shuffled around and sold to advertisers, banks or whoever wants to know our preferences and associations, then devalues the lives of anyone whose interests don't align with the on-demand economy. To these startups, humanity is an asset to be optimized.

And if you don't like it, just find richer friends.