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BizReport : Social Marketing : September 07, 2015

Consumers strongly disagree with social media use for credit scoring

In the wake of reports of Facebook securing a patent that would allow banks and financial institutions to assess a borrower's creditworthiness by checking their friends' credit scores, a survey by Equifax reveals that most consumers strongly disagree with financial companies assessing suitability based on their social media activity.

by Helen Leggatt

A survey of more than 2,000 adults in the UK by Equifax reveals that 56% of consumers strongly disagree with information they post on social media being used for the purposes of assessing suitability for financial products.

Three-quarters of survey respondents said they would be "very unlikely" (61%) to give financial companies permission to access social media data when applying for loans, a mortgage or a credit card or "fairly unlikely" (14%) to do so. More than half (52%) would be angry if their social media information was used to assess financial suitability..

"If companies go down this route they have to be transparent and educate consumers on how social media information could be used; consumers also need reassurance that, as with any personal data, privacy will be respected," said Paul Birks, director of decision solutions at Equifax.

"Using social media information to assess an application could be particularly useful for people who don't have a traditional borrowing history and therefore may have a 'thin file', such as a young person applying for their first loan. Companies have a moral and regulatory obligation to lend responsibly, and should investigate all the tools available to help ensure this happens."

Image via Shutterstock

Tags: financial services, social media

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