How Facebook friends can ruin your credit
January 27, 2010 by Valerie HelmbreckPosted in: Communication, Compliance, In this week's e-newsletter, Latest News & Views, cash flow, social networking
You had to figure those crafty bankers who brought you the economic debacle of the 21st century would also figure out how to use social networking to prosper. They have.
The latest method they’ve discovered to hike your credit rating — and justify charging you more for everything from a car loan to a credit card — is to use your deadbeat friends on Facebook to back up their belief that you must be a deadbeat, too.
A recent report on creditcards.com outlined this new technique by creditors of all types to tap into the info from social networking. Says the author: “In their quest to identify creditworthy customers, some are tapping into the information you and your friends reveal in the virtual stratosphere.”
In many instances, banks and other creditors are outsourcing their snooping to specialized social media analytics firms who crunch the data for them.
Lenders are cloaking their investigations as “risk assessment,” but the potential pitfalls of the practice are enormous.
Primarily, there’s no real way to prove that people are who they say they are on a social networking site. So the information being gathered has no way of being verified or corroborated.
There’s also the invasion of privacy that’s inevitable when the borrower or credit applicant doesn’t know who or what is being examined.
What can be done to prevent this sort of investigation? Government regulation is a long shot, given the recent reluctance of lawmakers to enact any banking reforms.
But consumers avoiding social networking sites is another.
And that’s about as likely as the government regulation.
FinanceTechNews.com delivers the latest Finance news once a week to the inboxes of over 150,000 Finance professionals.
Click here to sign up and start your FREE subscription to FinanceTechNews!
Tags: banks, credit rating, creditcards.com, Facebook
February 1st, 2010 at 11:11 am
So, who in their right mind puts what should be private information out for public consumption on social networking sites anyway? Give me a break!! If people are so stupid that they put their real name, address, date of birth, phone numbers etc. on Facebook, then as they say…There ain’t no cure for stupid.
February 2nd, 2010 at 12:21 pm
I am naive I’m sure but how – if you have set your privacy settings set to friends only does the lender have access to your information?
February 2nd, 2010 at 8:03 pm
Cite your source.
There is a federal law requiring full disclosure for stuff like this, so either you’re misinformed, or there is a loophole.
February 3rd, 2010 at 11:07 am
Once again, if there is some way someone can find out something, they will use it to their benefit. the problem is, will the information gathers have the intellectual fortitude to analyze the information correctly or just end up anal-izing the information. The first way could end up benefiting both parties, the second way will most likely harm all of society along with both parties. This is why there needs to be and are privacy laws because history has shown all too often that too much personal information in the hands of policy makers can screw things up worse than miscreants.
February 3rd, 2010 at 11:49 am
Again – for an application such as Facebook – where I do have an account – no one should put information that is in any way accurate. Not everyone will take the time to go through and set all of the privacy setting to “Only Me” as opposed to “Friends” – - all it takes is one “Friend of Friends” to get at your information and you could be screwed.
I still say – if you don’t make it a policy to put only the required information up on this type of social networking site – you are asking for trouble.
The only exception that I can think of is Linked-In which has been shown to be mostly business relationship oriented.
February 3rd, 2010 at 3:58 pm
So let me get this right, Mr Landrum; you’re not using your real, or “accurate,” name on Facebook? That’s the whole point of Facebook, is to get in touch and stay in touch with old friends. It’s kinda hard for people to find David Smith when he’s using the name “Frankie Cuddles.”
Along those lines, as said before, any information gathered on social networking sites is potentially bogus. Especially with common names. Do you know how many John Andersons there are from Detroit?
And for anyone who thinks that keeping your profile private will protect you, think again. Employers have been using MySpace and FaceBook for years to discriminate against potential candidates; private accounts and even deleted information is all fair game in the information age…
February 8th, 2010 at 2:20 pm
I find this highly unlikely. I work as a data analyst, and to glean any type of consistent, useful, credit monitoring information from a site like Facebook would be near impossible. And if this were the case, it would be like the old SEO days, where embedded in the tags would be the work “sex” a million times to pagerank it higher. I would create an account, and friend only banks!
February 8th, 2010 at 2:50 pm
This is the dumbest most panic-oriented propogandized thing I have seen in a very long time. The public is so paranoid about everything now, let’s create havoc and invade the one area left that people can find bonding. We’d go out of the house, but H1N1 has us feared to touch anyone in public. We’d take a vaction, but the shoe bomber has us grounded. We’d drive somewhere but Toyota’s are dangerous. We’d buy toys for our kids, but they’ll get exposed to lead paint. If anyone thinks any of this is actually going to happen, vote for Sarah Palin in 2012. The rest of us will be here, on facebook, twitter, myspace, whatever, with our real names and just living with the fact that not all information is private and paranoid delusionally people like the author and D Landrum need to think about natural selection and how long they would actually survive by themselves paranoid that someone might find out their real name is John Anderson from Detroit.
February 8th, 2010 at 2:54 pm
Julie E: if your fiends have pictures of you and their account is not private, then they can see the drunken party you attended last week.
February 8th, 2010 at 4:41 pm
Oh who cares.
The topic is Credit & Lenders. IRS has all the information anyway. Just don’t use credit cards. Pay cash – much cheaper. Keep your bills paid before you buy more stuff and you can have good credit. If you don’t know how to use money, get the heck off facebook long enough to find out how finanance works.
February 8th, 2010 at 6:04 pm
Blah – sounds like a bunch of garbage. The implication is that if someone wanted to sabotage someone else they didn’t like or had an axe to grind with they could prentend to be them and screw up their credit? Basically throwing out the business model of the credit protection folks?
Consider the naive person who even goes so far as to put their home address down, how would they know if they were loking at XYZ Anderson Sr. or Jr.
Editor, try to use more believable scenarios to scare the public; this one is a dead end.
February 9th, 2010 at 5:20 pm
Simple: sue the credit bureaus for defamation of character and libel.
February 11th, 2010 at 5:38 am
This blog is excellent. Keep up the good work, inspires me to keep building mine!
February 11th, 2010 at 10:29 am
Looks like you have bots attacking your blog. Does this mean you will implement CAPTCHA??
February 16th, 2010 at 5:26 pm
Amanda – you don’t have to worry about my friends having pictures of me drunk. I don’t ever let it go that far. I believe in personal responsibility and I have to drive home safely.
I do think that too many people are putting too much of their private lives on social networking sites – someday those things may come back to haunt them. And does anyone really need to have anyone else see pictures of themselves behaving irresponsibly – I think not! It’s not attractive, makes them look foolish at the very least and I’ll never understand why they do it!
February 22nd, 2010 at 2:18 pm
[...] http://www.financetechnews.com/how-facebook-friends-can-ruin-your-credit/ [...]
May 21st, 2010 at 8:58 am
Facebook security is a joke.. you can still view private facebook pictures.
May 21st, 2010 at 9:07 am
Facebook security is a joke.. you can still view private facebook pictures.