Moneylenders should be banned from using information found on people’s social media profiles to decide on the creditworthiness of applicants, Sinn Féin MEP Chris MacManus has said.
Mr MacManus said he would be raising the issue with the Central Bank and the European Commission following the publication earlier this month of a report by an EU-funded non-governmental organisation Finance Watch.
The report quoted from the website of Provident Personal Credit, a UK-owned moneylender that operates in the Republic and is regulated by the Central Bank. Provident’s website states that it sometimes researches “comments and opinions” made public on social media sites and may sometimes “match information on these sites with the data we hold to undertake behavioural analysis and assist with credit decisioning”.
Finance Watch, a Brussels-based umbrella group of non-profit members and experts set up in the wake of the financial crisis, highlighted this as an example of the “problematic” ways that creditworthiness assessments are made, which might include “irrelevant” data such as “information on whether the consumer is politically involved or not”.
‘Irrelevant’
“Not only is this type of data irrelevant in determining a consumer’s ability to afford a loan but it can also lead to a refusal of credit (and thereby to financial exclusion) based on discrimination,” its report concluded.
Mr MacManus said it was “shocking” that a moneylender 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 this.”
The practice “raises many issues of data protection”, as well as being “a question of basic ethics”, Mr MacManus added.
“Relying on social media can and will lead to bad credit decisions and consequent difficulties for borrowers.”
