Sinn Féin MEP Chris MacManus has called for moneylenders to be banned from using social media as a means of deciding on the credit worthiness of applicants.
MacManus was commenting after a major European report singled out a specific Irish moneylender for using this practice. The report from Finance Watch quotes Provident’s own website as stating “ As part of our ongoing commitment to understanding our customers better, we sometimes research comments and opinions made public on social media sites. We sometimes also match information on these sites with the data we hold to undertake behavioral analysis and assist with credit decisioning.”
“It is shocking that a moneylender can openly admit to using social media as a means of deciding on credit worthiness. Unfortunately, as the report points out a lack of detail in EU legislation in this area means they can get away with this.
“The use of social media in assessing credit worthiness raises many issues of data protection. There is of course a question of basic ethics here.
“Furthermore, it also suggests that the decision making process is not adhering to any rational and accountable factors. In short, relying on social media can and will lead to bad credit decisions and consequent difficulties for borrowers.
“I support the report’s call for “detailed rules in the CCD (Consumer Credit Directive) concerning which specific information that should be used to perform a creditworthiness assessment. The assessment should be based only on information needed to allow for an adequate personal budget analysis (data on income and expenditures), including all on-going credit and debts.”
“I will be raising this issue with the Central Bank and the EU Commission immediately. Sinn Féin is championing legislation to cap moneylenders’ rates but as this European report show that is only one of the problems with how moneylenders operate in Ireland. Change at state and EU level will help ordinary workers get fair credit at a fair price.”