It's Who You Know

As Banks Start Nosing Around Facebook and Twitter, the Wrong Friends Might Just Sink Your Credit

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wonderful life As Banks Start Nosing Around Facebook and Twitter, the Wrong Friends Might Just Sink Your Credit

Can't pay? Well, what about your friends?

Let’s take a trip with the Ghost of Christmas Future. The year is 2016, and George Bailey, a former banker, now a part-time consultant, is looking for a 30-year fixed-rate mortgage for a co-op in the super-hot neighborhood of Bedford Falls (BeFa). He has never missed a loan payment and has zero credit card debt. He submits his information to the online-only PotterBank.com, but halfway through the application process, the website asks for his Facebook login. Then his Twitter. Then LinkedIn. The cartoon loan officer avatar begins to frown as the algorithm discovers Mr. Bailey’s taxi-driving buddy Ernie was once turned down by PotterBank for a loan; then it starts browsing his daughter Zuzu’s photo album, “Saturday Nite!” And what was this tweet from a few years back: “FML, about to jump off a goddamn bridge”?

A new wave of startups is working on algorithms gathering data for banks from the web of associations on the internet known as “the social graph,” in which people are “nodes” connected to each other by “edges.” Banks are already using social media to befriend their customers, and increasingly, their customers’ friends. The specifics are still shaking out, but the gist is that eventually, social media will account for at least the tippy-top of the mountain of data banks keep on their customers.

“There is this concept of ‘birds of a feather flock together,’” said Ken Lin, CEO of the San Francisco-based credit scoring startup Credit Karma. “If you are a profitable customer for a bank, it suggests that a lot of your friends are going to be the same credit profile. So they’ll look through the social network and see if they can identify your friends online and then maybe they send more marketing to them. That definitely exists today.”

And in the last year or so, financial institutions have started exploring ways to use data from Facebook, Twitter and other networks to round out an individual borrower’s risk profile—although most entrepreneurs working on the problem say the technology is three to five years away from mainstream adoption.

“Credit score is a lagging indicator,” said Brett King, a tall, puffy Australian with white blond hair who is the founder of the online-only bank Movenbank and author of BANK 2.0: How Customer Behavior and Technology Will Change the Future of Financial Services. “At best, your credit score is about 60 days behind. What we’re trying to do is look for things that reflect the likelihood of a future default, rather than what’s happened in the past.”

Movenbank is an online bank in private alpha release that replaces plastic credit and debit cards with a mobile device such as an iPad or smartphone. Mr. King is a major proponent of the questionable young science of using social media to evaluate creditworthiness.

When it comes to online privacy, Mr. King subscribes to the Mark Zuckerberg school of thought: standards are evolving, and the world will be better for it. (As long as you’re connecting and sharing, only good things can happen to you!) “Our view of what ‘private’ is, is changing,” Mr. King said. “We make friends with people we barely know!”

He predicts that banks will soon start asking customers to verify their social media profiles. Not everyone has a social media presence, of course, so submitting your Twitter handle will first be pitched as a way to provide customer support or account alerts, which will later open the door for “more complex products,” Mr. King said.

Employers have already started using social media to evaluate potential candidates, and in 2009 a woman in Quebec stopped receiving disability payments for major depression after Manulife decided, based on beach vacation photos on Facebook, that she seemed happy enough to work after all. “I’m sure that insurers now are looking at Facebook profiles and saying, ‘You’ve said you’re not a smoker? Well how come in three of these ten photos where you’re out with friends, you’re smoking?’” Mr. King said.

That means that tweet, “Just got fired, man. Spending my severance at the bar!” may have been ill-considered.

Mr. King is especially interested in identifying customers who can evangelize the service to a sizable crowd of cloud-friends. Movenbank requires users to connect their Facebook accounts upon registering, data from which will be baked into a proprietary “CRED” score, a number that determines which rates and products are available. The exact recipe is still being written, but eventually Movenbank will boost your CRED as you hook it up to your accounts on Twitter, LinkedIn and even eBay, which calculates a reputation score based on buyer feedback. It’s not the only metric, Mr. King said, but a strong Twitter presence could tip the scale in favor of a marginally risky borrower.

Much of this is driven by enterprising techies looking for the next big sector of the economy to disrupt with a social twist. Back in July, the 34-year-old internet pundit, angel investor and startup entrepreneur Kevin Rose, best known as the founder of Digg, sat down in front of his webcam in a t-shirt and baseball cap to talk to the internet about credit cards. “This might be potentially the dumbest, least-vetted idea I’ve ever put out there,” he said. “What if we could make credit cards a little more social?”

Mr. Rose was just spitballing, and his idea seemed innocuous enough. But there’s a nightmare scenario: if banks learn how to use social media, they could gather information they aren’t allowed to ask for on a credit application—including race, marital status and receipt of public assistance—or worse, to redline segments of the social graph.

In other words: choose your online friends wisely, for they may one day determine your APR.

Lenddo, a Hong Kong-based microlending startup incubated in New York’s FinTech Innovation Lab, calls itself “the first credit scoring service that uses your online social network to assess credit.” The first thing Lenddo asks for is a Facebook account; then it wants access to Gmail, Twitter, Yahoo, and Windows Live. The Observer was given a respectable score of 470. But when we tried to apply for a loan, we were told “you need at least 3 connections with scores above 400 in your Lenddo trusted network.” (We wouldn’t have been able to get a loan anyway: Lenddo is only available in the Philippines, although it recently hired an ex-Googler to head up the Americas.)

The company’s algorithm is proprietary and secret, said CEO Jeff Stewart, but the primary metric is what Lenddo knows about the people you’re friends with. “We think that in the age of the internet you should be able to establish your reputation and your identity through your social graph, through your on- and offline community, and use that to get access to financial products and information,” he said.

If Lenddo sees one of your best Facebook buddies took out a loan and paid it back, there’s a good chance you will too. “Our backgrounds are in machine learning and pattern recognition,” Mr. Stewart said. “It’s some serious math.

“There’s no reason there shouldn’t be thousands of engineers working to assess creditworthiness.”

In another nifty but nefarious innovation, Lenddo reserves the right to broadcast your loan status if you fall into default. As the site warns: “Failure to repay will negatively impact your Lenddo score, as well as the score of your Lenddo friends. Lenddo MAINTAINS THE RIGHT TO NOTIFY YOUR FRIENDS, FAMILY AND COMMUNITY if the borrower fails to repay, however, this is only done after several notifications to the borrower and an attempt to work out a payment plan.”

“I think Mark Zuckerberg said it best,” Mr. Stewart said. “Every industry will be in fact impacted by social.”

Banks have been curious about using social media to gauge risk for at least a year, said Matt Thomson, VP of platform at Klout, which calculates “influence” based on a user’s social media activity. Determining creditworthiness is not a core product of Klout’s, he said, but banks have approached the startup to ask about it. He wouldn’t name names. “It’s really like the who’s who of banking,” he said.

(Mr. Stewart of Lenddo also said his startup is approached “regularly” by major banks curious about the algorithm.)

Klout, arguably the leader in developing a metric for social media power users, has taken a beating from bloggers for being spammy and potentially insecure. The New York Times wrote about shocked parents who discovered Klout had autogenerated skeleton profiles for their children, based on what it had gathered from their connections to others; the science fiction writer Charles Stross called the service “the internet equivalent of herpes.” R. Ethan Smith, who blogs as The Startupist, recently wrote a critique of Movenbank’s projected partnership with Klout. “Klout claims that I am influential about New Jersey, coffee, and iPads,” he wrote, noting that he has no real expertise in any of the three and doesn’t even own an iPad. “Now, let’s assume that King is completely serious about using online social profile data to determine a Movenbank user’s influences, which will essentially determine their ability access a line of credit… To stake tangible dollars on what seems to be a relatively easily manipulable algorithm is not something I would characterize as ‘good business sense.’”

Media theorist Douglas Rushkoff dismissed the idea that social media credit scoring is a serious erosion of privacy, mostly because there’s nothing left to hide. “We’re already in the nightmare scenario,” he wrote in an email. “They already know everything about you—more than most of us realize. If anything, the addition of social networking information to this data mining will help us come to some understanding of how much more these companies know about us than we know about ourselves.”

The precise formula for FICO, the most widely used credit score, is secret and proprietary to the Fair Isaac Corporation, a publicly traded company. Experian and TransUnion, two of the three national credit bureaus, did not respond to requests for comment on this story; Equifax, the third, did respond. “Our corporate development professionals are very aware of the opportunities to enhance our proprietary data and partner with companies who add value to the accuracy of our reporting, which helps our customers make better decisions prior to lending,” a company rep said in an email, adding that Equifax can’t comment on future strategies because it’s a public company.

This new use for social media data could turn out to be empowering, Mr. Rushkoff pointed out, if it leads to people lending to one another. A reputation score based on the social graph could lower the barrier to entry for peer-to-peer lending startups. “Instead of everyone outsourcing their savings, investments, and borrowing to truly evil institutions who use what information they about us simply as an excuse to drain more money from us,” Mr. Rushkoff said, “we would invest in one another.”

Snow is falling lightly outside as Mr. Bailey logs off of PotterBank.com. Suddenly, a bell rings. It’s his iPhone: a text message from Lending Club, a peer-to-peer lending startup based in San Francisco. His friends saw his Tumblr post with photos of the coveted apartment, and forwarded it to friends of friends. Collectively, they’ve pledged to invest over and above the needed deposit. He looks up, smiles; looks back at his phone, and taps out a tweet: “No man is a failure who has friends!”

CORRECTION: The original post incorrectly said Lenddo is based in New York. The company is officially headquartered in Hong Kong.

Follow Adrianne Jeffries on Twitter or via RSS. ajeffries@observer.com

Comments

  1. Argh, this is what annoys me about “Big Data” … It’s not just numbers! You have to be mindful of the underlying assumptions used to define and create each data point. It’s true that birds of a feather flock together, however it’s also true that Facebook and social media are lowering the bar for “friendship”. More people and weaker relationships, seems to me the definition of “friend” that was used in most of the socio-psychology research backing this strategy is not the same definition of “friend” that social networks understand.

    1. Anonymous says:

      Another interview I did for this story — the guy was like ‘yeah, who your friends  are is often correlated to creditworthiness. But then there’s people like Bernie Madoff.’ (that’s a paraphrase)

  2. Cordell Wise says:

    Correlated mathmatically or just “everyone thinks there’s a correlation”?  There’s huge risk for overfitting.  As soon as this happens there’ll be a service to pare your social map to get rid of the neredowells and compromise the algorithms.

    1. Anonymous says:

      We’ll see how accurate it is by what happens. If banks spending spending tons of money on it, it’s probably legit. It’s against their interest to use bad metrics.

      1. Cordell Wise says:

        Agreed.  I’m guessing the initial inquiries are around marketing which doesn’t have the same performance hurdles as risk measures.  Just because it’s not credit bureau data doesn’t mean it’s exempt from redlining rules and FCRA.

      2. Anonymous says:

        It’s the old laws, new technology problem. If it takes off, my bet would be there will have to be new legislation or an expansion of FCRA to cover it.

      3. Anonymous says:

        It’s the old laws, new technology problem. If it takes off, my bet would be there will have to be new legislation or an expansion of FCRA to cover it.

      4. Anonymous says:

        It’s the old laws, new technology problem. If it takes off, my bet would be there will have to be new legislation or an expansion of FCRA to cover it.

      5. D Rant says:

        Really? How’d they subprime lending thing work out?

      6. Brett King says:

        Check out Zopa, Lending Club and Prosper. Peer-to-Peer Lenders who have lower default rates than the big banks and who use social media already.

    2. Anonymous says:

      We’ll see how accurate it is by what happens. If banks spending spending tons of money on it, it’s probably legit. It’s against their interest to use bad metrics.

  3. Admin says:

    I firmly believe social media will eventually kill the internet. Or at the very least, make more people start to unplug and back away as much as possible. This is the kind of stuff which is incredibly invasive and for the most part, to be used against you.

    1. Anonymous says:

      It already killed the web, right? At least according to Wired. 
      http://www.wired.com/magazine/2010/08/ff_webrip/all/1

    2. Anonymous says:

      It already killed the web, right? At least according to Wired. 
      http://www.wired.com/magazine/2010/08/ff_webrip/all/1

    3. Anonymous says:

      shamless plug: http://redmick.tumblr.com/post/14224727319/when-injustice-becomes-law

    4. Suse says:

      Its not going to kill the internet. Once again people over react to to what they read. Just like people the internet will evolve over time.

    5. Joseph Whitehead says:

      3 words:  AOL, CompuServe, Prodigy

      Or more explicitly:  They had the same noobie experience available that people realized was very limited.

  4. Vanessa Waite says:

    or how about don’t use privacy stealing social media at all? every add I receive in email clicks through to Facebook and I refuse to be a FB member so I lose cause I can’t get deals WTF? remember when email uses to come in three forms, html, text and aol? Advertisers need to recognize there are people that WILL NOT use social media.

    1. Anonymous says:

      You should talk to this guy. http://www.betabeat.com/2011/12/13/in-which-eben-moglen-like-legit-yells-at-me-for-being-on-facebook/

    2. Anonymous says:

      You should talk to this guy. http://www.betabeat.com/2011/12/13/in-which-eben-moglen-like-legit-yells-at-me-for-being-on-facebook/

    3. Brett King says:

      Vanessa,

      I’m afraid statistically you’re increasingly in a minority. Which is why as a collective we’re thinking about how to use social data to make banking more transparent and fair.

      In the end, it may actually cost you money not to be on social media, because your value to service providers is on the decline. Your network is valuable, and your advocacy in that network is measurable. In the end when people choose new products, services and brands based on what their friends recommend, this is a very back-to-basics approach to commerce. 

      I think people forget. Social media is not new. It is the behavior we’ve been exhibiting for centuries, it’s just amplified by technology. 

      If you don’t believe me, just ask yourself if you’ve ever asked a friend for a recommendation on a product, or a service. “Hey, what do you think about this [brand/product/company/service]?”

      Social Media is not scary – it’s what you’ve always done.

      Oh, and BTW – email is dying too. 

      BK

      1. Anonymous says:

        I find this comment very insightful and hope others will upvote it to the top.

      2. Anonymous says:

        Oops that comment sounded like spam, but was meant sincerely!

      3. Who told you that Movenbank is a bank?

      4. Anonymous says:

        Movenbank. To clarify, the money-holding functionality hasn’t launched yet.

      5. @brettking, is Movenbank a bank?

      6. Brett King says:

        Inaccurate Info,

        As far as the customer is concerned, we’re the bank. Actually, we’ll have various licenses that allow us to operate in the jurisdictions we’re present. In some of those locations it may be as simple as an e-Money license (UK), or we may look at our own charter. 

        For our launch in the US we’ll be partnering with banks who will do the FDIC and compliance heavy lifting. However, the customer will have the relationship with Movenbank and we’ll execute the banking ‘stuff. 

        Think of it like a VMNO model. You don’t think of a VMNO as any less of a mobile operator because they don’t own their own cell towers – do you?

        BK

      7. This is about the word “bank,” not mobile phones.

        New York code, Banking, § 132:  “Use of sign, or words, indicating bank or trust company by unauthorized persons prohibited.”

      8. Brett King says:

        How do you explain titles like Photo Bank, DNA Bank, Seed Bank, Sperm Bank, etc then?

        We are compliant with the NY Code. If you’d like to know more, I’m happy to take this offline.

      9. It walks like a duck.

        Florida Statute 655.922:

        “… which indicates or reasonably implies that the business being conducted or advertised is the kind or character of business transacted or conducted by a financial institution or which is likely to lead any person to believe that such business is that of a financial institution… ”

        To “take this offline” defeats the purpose: A correction by the publisher.  What happened to all that talk about transparency?

      10. Brett King says:

        There’s a difference between revealing our trade secrets and business strategy, and being transparent about customer engagement.

        You might differentiate between green dot or Walmart debit cards and a traditional ‘bank account’ for example. However, from a regulatory perspective it walks like a duck, but doesn’t require a full banking charter.

        So you absolutely CAN be bank without a banking license today. There’s $200Bn in debit card deposits this year that sort of prove that unequivocally.

      11. Name one debit card issuer using “bank” who is not a bank.

    4. Anonymous says:

      I don’t have any principled objection to using social media.  I am merely mystified why I should want to.  After long wondering in a vague sort of way, I set up a Facebook account.  I mostly friended some old college friends from *mumble mumble* years ago.  It was good to catch up a bit one what we all were doing. 

      How does this extend to day to day use of Facebook?  Apparently the idea is that I will put up frequent posts about the daily trivia of my life, will toss in a bit of political bloviating, and will make recommendations to my friends about purchasing various goods and services.  The mere thought of spending my time writing this stuff puts me into a slumber.  The thought of reading other people’s stuff is a nightmare.  Yes, I spent countless hours with them in college, and back then we were intimately aware of each others daily trivia, political views, and product usage.   That was a long time ago, and whatever relationship we have now is not of that sort.  There is a bunch of pending friend requests from people who went to my high school.  I haven’t answered them, as my connection with them is even more tenuous, and friending them would make Facebook even less useful.  Mostly my account is dormant.  I occasionally look at the front page and remind myself why I don’t look more often. 

      OK, so far all I have really told you guys is that I am really old.  But how is the Facebook generation going to use social media as they grow older?  Are we going to see middle aged people posting drunken party photos?  I really hope not.

  5. Speedy Evans says:

    me standing here will it go up or down..well next pic will be of my favorit banker ..as soon as i can find one..if anybody need to face some books .lets check out there books 1st

  6. LE says:

    I’m sure insurance companies will also use this info as well. But if this becomes any clear threat people will figure out ways to game it by stuffing their profiles with the right type of contacts and it will take the vetters time to catch up (similar to SEO and link farms way back.)

    1. Anonymous says:

      A good analogy.

    2. Mike Holcomb says:

      50 year olds with a mortgage and a gas card are about to become a lot more popular.

    3. Anonymous says:

      This is NOT a difficult response: “I do not profide my personal social media information.”

      If people don’t provide the information the banks quickly lose business and then change policies.

      It wasn’t that long ago where I was on the leading edge…companies wanted a land-line phone number.  I didn’t have one…only my cell.  How many companies now require you to have a land line?

      DON”T BE A SHEEP.  “No” is a completely acceptable answer.

  7. Here’s a different twist on Social Media. Had an experience which might be unique now, but am convinced it will become more the rule.

    Got a call about a job. Was asked why they couldn’t locate my Facebook or Linkdin page. Said I didn’t have one. I don’t do Social Media. They said that there’d be no interview then.

    Several reasons I can see:

    1. They wanted to know what I was up to by Facebook.
    2. They wanted to see a picture of me, because someone may have thought that they knew me but were not sure.
    3. They wanted to see how old I looked.

    Anywhich way, since I had no Social Media they assumed that I had something to hide or that I was unfamiliar with modern technology. Can it be that we are headed towards a spot where we MUST have Social Media participation or we will be denied jobs, insurance, credit, etc?

    1. Anonymous says:

      That is completely bonkers. But at the same time, we’re hiring a new reporter and the first thing I want to see is their Twitter—because it gives an idea of what they’re like, and because it shows to some degree how influential they are on the web.

      1. D. Mitchell says:

        You wouldn’t hire me then… I don’t do twitter.

      2. Guest says:

        twitter is for retards. good job hiring a retard.

      3. hiplainseditor says:

        For journalists, writers, editors, and such Twitter could be considered relevant: way to stay current, to share info, to influence. 

      4. Anonymous says:

        I got $50 that says you are HR and not a reporter.

        i have yet to  meet an HR person that was qualified to do anything other than making sure the application was filled out properly.

        The first thing I do when I walk into a company AS A HIRED CONSULTANT is tell them to screen their HR people and see how they would feel after going through the hiring process.

        HR departments are not run correctly especially regarding IT fields.

    2. Nunzio X says:

      I spent several years living in Oklahoma, one of the self-professed “buckle(s) of the Bible Belt.” And when I first moved there, I heard about something I’d not been exposed to—the “Book Of Revelations” and its bizarre BS revolving around the “End Times,” etc.

      Part of the legend of the End Times concerns itself with “the Mark of the Beast,” presumably the numeral 666 which, if you don’t have it Sharpied across your forehead, you can’t buy anything or obtain basic services.

      I’m not involved in social media at all, and won’t be in the future. Fortunately I’m not looking for a job or needing to borrow money, but if I had to join Facebook to get a job or borrow money, that’d be my cue that the “Mark of the Beast” isn’t 666, but fucking Facebook.

      Time to learn how to function underground, boys and girls. Learn spycraft, learn as many of the Dark Arts as you can, because society is starting to divide up between The Connected and the Disconnected, and if you’re Disconnected, you’re NOT IN COMPLIANCE.

      1. Dusty says:

        It has been happening for years. In the UK TV owners have always had to register thier ownership of a TV with the state and pay an annual tax.

        Historically this was to fund the BBC which was specifically prohibited fom any form of commercial advertising at a time when only a minority had TV’s, It is still true to some extent nowadays but the near univeral ownership makes BBC funding out of general taxation more sensible.(most people in the UK would NOT like to see the BBC commercialised)

        The Magic word here is “Near”. I know several people who do NOT own TV’s. Of course as a result of this their homes do not appear on the government databases as having paid their TV tax. And the persecution for dareing not to posess a “Viewscreen” (See 1984) is relentless.

        I have no doubt that as “Interactive” services become more common those who chose not to have TV’s in their homes will find themselves increacingly under presure, both from the state and other commercial institutions for not being “with the program”

      2. Joseph Whitehead says:

        Just finished watching the “Prisoner” series, which is kind of ironic considering your post. 

    3. Joseph Whitehead says:

      Working for that company would be like working at Wal-Mart or joining the Church of Scientology…

  8. Od says:

    Have you heard of Zopa? For while they had a peer to peer lending faclity, where those with bad (traditional) credit ratings could post their case and have various people pledge certain ££s to their borrowing requirement.

  9. The idea of basing credit on Facebook or social media friends is just plain ignorant. I’d say more people use these social media sites for networking rather than their actual friends. 

  10. The idea of basing credit on Facebook or social media friends is just plain ignorant. I’d say more people use these social media sites for networking rather than their actual friends. 

  11. Moribund Cadaver says:

    This is the result of society run as a corporation – in effect, it’s social corporatism.

    The people who will help bring about this brave new world see reality through the lens of raw free market competition. Everyone is an actor in the game and the automatic, even unconscious, assumption is that all things can be judged by someone’s stock portfolio.

    It’s a warped reality tunnel, but quite understandable how it’s come to this. All power and influence has been concentrated in business and the shaping of society is dominated by business. To the people on that tier, it’s only sensible to view life itself as in terms of corporate hierarchy and the rules of business. I’ve met several business evangelistas who are, to put it mildly, simultaneously brilliant and batsh*t insane.

    And that’s the rub. They believe that they define what reality is (and it’s corporate reality). Social media is seen as another valuable, up and coming tool to consolidate power and information, and also invasive control of the pieces on the board (human beings). But in their madness they don’t realize that human beings don’t actually operate by those rules. They’ll mis-use social media (and already are), develop delusional expectations about what it can and can’t be used for.

    They will not care about the collateral damage wreaked along the way.

  12. Tom Clarke says:

    Hey, this is just like the good old days when you had to face a bank manager to get a loan and if he didn’t like the look of you (i.e. you were black), you didn’t get it. Only this time it’ll be controlled by computers. Racist computers. What could go wrong?!

  13. Tom Clarke says:

    Hey, this is just like the good old days when you had to face a bank manager to get a loan and if he didn’t like the look of you (i.e. you were black), you didn’t get it. Only this time it’ll be controlled by computers. Racist computers. What could go wrong?!

  14. Monkee Do says:

    Privacy and digital rights are 2 big trends coming. A new app, still in beta lets selected users post on a private wall where content is never stored on Facebook server. With kids using messaging instead of email, this could be their reputation insurance down the road. Get a beta invite http://www.privatestring.com

  15. Monkee Do says:

    Privacy and digital rights are 2 big trends coming. A new app, still in beta lets selected users post on a private wall where content is never stored on Facebook server. With kids using messaging instead of email, this could be their reputation insurance down the road. Get a beta invite http://www.privatestring.com

  16. Monkee Do says:

    Privacy and digital rights are 2 big trends coming. A new app, still in beta lets selected users post on a private wall where content is never stored on Facebook server. With kids using messaging instead of email, this could be their reputation insurance down the road. Get a beta invite http://www.privatestring.com

  17. Guest says:

    That’s stupid. I don’t even have a Twitter or a Linkin or whatever else besides facebook. Plus anybody who has a facebook knows that just because you are “friends” on facebook, that doesn’t mean you “flock together”. The people I talk to in person and associate with the most are my “friends” on facebook but I don’t ever communicate with them on there because I actually talk to them in the real world. Most other people that are my friends are ones from high school or college and I haven’t seen them in years and I suspect a lot of people have friends like that. If you HAD to give a facebook account to get a loan or whatever else the banks (or any other business) wants, I would just set up a dummy facebook account and let them see that one.

  18. Googlechef says:

    Why people use their real names etc… is beyond me.

  19. Bingo Slomo says:

    You actually think the Korpofascists will allow things like Lending Club to exist if it ever becomes a significant threat to their racket.  major polly anna attack 4 sure

  20. Canadian Cowboy says:

    The only thing that matters is “cash flow” and I have enough at all times to buy whatever I need without needing any of the pompous ass clowns mentioned above. Take your credit scores and put them where the sun don’t shine. I have enough for guns and grenades to take you out if necessary. Come anywhere near my ranch and I will blow your brains out. And why do you need to know who I am?

  21. Canadian Cowboy says:

    The only thing that matters is “cash flow” and I have enough at all times to buy whatever I need without needing any of the pompous ass clowns mentioned above. Take your credit scores and put them where the sun don’t shine. I have enough for guns and grenades to take you out if necessary. Come anywhere near my ranch and I will blow your brains out. And why do you need to know who I am?

  22. Canadian Cowboy says:

    The only thing that matters is “cash flow” and I have enough at all times to buy whatever I need without needing any of the pompous ass clowns mentioned above. Take your credit scores and put them where the sun don’t shine. I have enough for guns and grenades to take you out if necessary. Come anywhere near my ranch and I will blow your brains out. And why do you need to know who I am?

  23. NotaUser says:

    All the more reasonnot to use any of the ‘social networking’ sites.

  24. NotaUser says:

    All the more reasonnot to use any of the ‘social networking’ sites.

  25. D Rant says:

    That’s fantastic news! With any luck, these systems will be online sooner, and the number of loans produced will plummet, causing prices on everything to come as buyers simply can’t afford whatever they were getting loans for in the first place. Save your money, and pay off all your debt, because they’ll be some amazing deals in the near future!

  26. hdmi says:

      Seriously? It’s shit like this… I’ve got an eclectic group of friends on facebook ranging from business partners to drug-addicted ex-classmates and christian fundies like my aunt. The notion of “you are the company you keep” erodes in the digital space.

  27. BestGuest says:

    Yea I have to agree with some of the others on here, all of this bothers me but the thing about “birds of a feather flock together” makes no sense.  What is that based on?  No one thinks that’s true.  My mother has outstanding credit but she’s a social worker and friends with a lot of those people online.  You’re telling me keeping in touch with all the babymakers from my highschool not only fills my feed with annoying updates but will affect my “Cred” as well?  This is a little too absurd.

  28. Cthomason12 says:

    Whether your friends payback loans has absolutely no correlation to whether YOU will payback loans. This is absurd and these people are so mixed up they’ll do anything ruin your credit, get higher rates and scare you into paying back by giving your private information to all your friends and telling em your broke. RIDICULOUS.

  29. JohnBear says:

    Offering consumers a choice is important.  The banking industry seems  to move rather blindly by herd instinct – sometimes
    to safe pastures and sometimes over the local cliff.  If some banks start  doing something
    that seems to make money, the rest will soon follow suit.

    Mister King is turning in the social media direction, which
    has obvious benefits for banks – with potential penalties to those who do not use
    social media accounts or do not manage them with care. It will be interesting to
    see if the industry will follow en-mass.

    An alternative banking solution that I am developing offers
    extremely safe, secure, simple, and efficient online financial transactions to “any
    consumer with a valid bank account”.  That
    is a very simple and effective criterion for enabling consumer online transactions.  Our
    approach encourages personal financial responsibility and doing transactions through
    banks, which improves your conventional FICO score based on your personal tranasctiuon
    profile, and is not based on who you are linked to on Facebook and Twitter.  Both systems offer consumers some advantages. We
    expect to provide more real consumer security, privacy, and convenience than
    Movenbank, PayPal, eBillme, etc. but they each have strong points and features
    that can improve consumer financial 
    transactions.

    The point is that Consumers
    need have a choice, which is a good thing about competing alternative transaction
    systems.

  30. Sounds like Reg B needs to have a section regarding personal social information.

  31. Aaron C says:

    What stops us from creating a fake Facebook profile that looks real ?  What if I post a photo of my” implied” million dollar mansion ? I didn’t clearly say it was mine, the bank assumed it was mine.  Is that “friend” of mine the real Donald Trump ? Who knows ? Find the weakest link and pull on it. Yeah I’m Evil. lol.

  32. Cuba says:

    MY 2 Cents

    The fico score system is fine and works well. people just need to realize that the bank makes the parameters. I would say that the fico report(cbr)can be tweaked with more detailed info. All bankers should know that with in 2 min after a look at a Fico report you can easily determine if an applicant is qualified or not for loans or anything else the bank wants to do. 

    This add the social networking factor is bad and is what is wrong with our nation today.  This does not make banking more transparent and fair it does the opposite and make you more transparent. If you want the bank to be  more transparent then you should ask the to release there most recent transactions(loan) via fico score and the other so called parameters. This will never happen and the bank changes rates daily. 

    Facebook is leading the blind and many are becoming zombies with all of the social networking.The bank is looking to keep and attract more customers but instead of pouring there money into this crap they should just train there employees. The bank isn’t really missing out on funds it is just being greedy. I don’t see how who I know or if I check into star bucks while I am on the can really matters to my loan potential.

    The online banks and social lending are great but don’t reach everyone due to lack of computers and internet access. This is where the traditional banks are trying to catch up and get there missing revenue but once again if they actually train there people it would just work in there favor.

    Plain and simple social networking and credit should not go hand and hand. We need to realize that the social network aspect is working against us as consumers. If you work at the bank this makes you job easier as you are able to target and classify your consumer. I don’t want to be classified by Facebook or any other site. 

  33. Paul says:

    “What we’re trying to do is look for things that reflect the likelihood of a future default”

    By looking at OTHER people’s PAST defaults?

    I’m not sure I follow the logic.

    Is this just a case of yet another industry forcing social media (or some other new technology) into play, rather than using tech that will actually have an impact? I smell a scared-s**tless marketing or IT manager who let social media pass them by in 2011 and so now feels the need to make up for it!

    Don’t get me wrong, Credit Scoring is hardly perfect. But this doesn’t remedy anything at all – it just leverages other people’s Credit Scores… So if anything it dilutes the individuality of each consumer, making the results less reliable…

    My personal relations are of no concern to my bank manager. Are they suggesting that when my friends run into trouble I should abandon them for my own benefit? Seems a bit hypocritical of an Industry primarily concerned with loaning money to people who need help…

    Or should I censor my online relationships in an attempt to hide my real life relationships from banks… and undermine the whole freaking point of social networking in the process?

    And to think I read a comment below that says the point is to “make social media more transparent”. For who? The social networks themselves are in charge of that, not banks! Are they saying that my social media profiles should show my credit rating and missed loan payments for all to see? If so then heck, why not put my penis size on their for good measure (pun intended!)? Or, by ‘transparency’, do they mean that just banks will gain access to more information about us? And along those lines I’d like to say that I had a nightmare with a high street bank not too long ago and decided I would cut all ties with them… If my friends use them does that mean they will be snooping on MY social networking profiles? Well I explicitly do NOT give them permission… so who polices that?

    Sick. Stupid. Ineffective. Invasive.

    Say goodbye to your customers…

  34. Joseph Whitehead says:

    “Lenddo MAINTAINS THE RIGHT TO NOTIFY YOUR FRIENDS, FAMILY AND COMMUNITY”
    This is very much illegal in most states.  The same thing happened when a certain Korean game company was installing spyware (namely, keyloggers that worked even when not playing) alongside the games they made.  Sudden culture shock when they found themselves in hot water for a practice that is heavily frowned upon by the authorities in the US.  Interestingly, it was partially over financial privacy laws as well.

  35. The big mystery to me is why anyone would want to be on Facebook in the first place.I know, I know – so that people can connect with each other, so that they can share updates of their lives, so that fans of bands or singers or actors or what-not can keep up with what their idols are doing, and on and on and on.Conversely, why would anyone want to constantly invite strangers into their homes. Or have those strangers pull their desk drawers out and examine their personal papers. You’re essentially embarking on the same sort of behavior when you start using social networks heavily.I must be a much more private person than most people I know. The thought of constantly having to monitor my personal information security settings in order to keep in touch with family, friends, or acquaintances, frankly just doesn’t sound like something I want to invest time in. And I find that I’m just not that willing to share all kinds of stuff anyway.So, bottom line, what’s the point of being on Facebook anyway, and what value does it add to my life that I don’t already have? That’s a question I haven’t received a good answer to yet.

  36. This may not be the best place to ask this, but I’m interested in seeing if I can have a short sale and I don’t know how to find a local, highly regarded realtor… do you know anything about this realtor? They’re located in Fair Oaks, CA 20 min from me and I can’t find reviews on them – Becky Lund & Associates, 8814 Madison Ave Fair Oaks, CA 95628 (916) 531-7124.