Wired, reports that a credit card company has come under fire and FTC investigation for “behavioral scoring”: reducing credit limits for people who use a variety of services. These services included, “Direct marketing merchants [like, one assumes, Amway and Nutrilife], marriage counselors, personal counselors, automobile tire retreading and repair shops, bars and night clubs, pool and billiard establishments, pawn shops, and massage parlors.”
I’d doubt that there’s any firm social science that shows that pool players are bad credit risks but it’s pretty certain that getting divorced, going out drinking every night, buying a boatload of Amway products, pawning your possessions and the like all correlate with financial distress. (”Massages,” furthermore, would correlate with financial distress when they are, ummmm, something else and therefore lead to marriage counselor visits.)
I personally wouldn’t have any problem if my credit card company did things like this. And even the FTC itself doesn’t contend that the company violated the law; just that it didn’t disclose its practices. In fact, I would see this kind of scoring as a net-benefit to consumers: the more companies can distinguish between “good” and “bad” consumers, the better they can treat “good” consumers and the more they can focus on turning “bad” consumers into good ones.
Loading ...
It’s ironic you put “good” and “bad” in quotes. Good and bad in this context are defined from the perspective of the credit card company. It might be “good” and in a customer’s best interests to get marriage counselling or other mental health professional services. Do you want to discourage that? Do you want to stigmatize mental health services?
Where does it stop? Political donations? Bought something at a gun store? Bought meat?
I too am skeptical that they’re using the best of science when judging their risks. But that’s their problem. What gets me is when people imply that this could lead to racism. Why would it? Credit cards are greedy and greed is color-blind.
Max –> I agree it feels creepy. But the credit card companies aren’t providing health care. They’re assessing the risk of loaning people money. At that it’s an unsecured. FICO tells them about a person’s past but it doesn’t help with what is going on right now. Divorce isn’t cheap; if someone’s headed toward one surely they’re more of a risk.
Where does it stop? I don’t know. Should their be legally defined boundaries?
How do I buy your products
http://www.cbrown94.qhealthbeauty.com
http://www.quixtar.com IBO#5470795