Roughly 850 million people use Facebook, and banks see the potential to earn big bucks based on the relationships each of these users have with one another. TheFrugalista.com is shocked, nervous and outraged at this!
Your Social Net Worth = Your Financial Net Worth?
According to the Huffington Post banks are keen on using social metrics and the profiles of people on your friends list to analyze lending decisions. Why? Simply put, institutions believe birds of a feather flock together, especially in social media. In other words, since your cyberbuddies (might) have poor credit and lifestyle habits, then so do you. And so you shall suffer.
Implications such as these will no doubt affect consumers, as not only will people be judged based on the behaviors – or perceived behaviors – of those around them as a dangerously irresponsible, but they can be placed at risk for high APRs or even denied credit when they need it most. Imagine the shock and pain of being denied a mortgage because you have great credit but your best friend has a foreclosed home, low-paying job and posts about her recreational substance use on a regular basis. Ouch.
… Hey, Shouldn’t You Pay Me for That?!
Oh, and another thing: referrals.
Not only would working credit companies and banks use your information to assess things like creditworthiness, and whether or not you’re employable, but they also want to use your social media profiles for prospecting purposes.
That’s right, instead of asking you to refer names based on your own voluntary desire, companies basically want to go through your Facebook profile like a phone book and figure out which of your friends they want to advertise their products and services to. Something tells me not only would they drop your name in the marketing process, but they would more than likely conveniently skip over giving you any financial rewards or referral bonuses based on successful conversions in your friends list.
MovenBank CEO Brett King boldly proclaimed that customers who limited their Facebook visibility behind strong screens, or better yet, had no Facebook profile at all, would be – to put it bluntly – “less valuable” due to the lack of data for the company to farm for business activity.
TheFrugalista.com says – HELL TO THE NO!!!