Sinn Féin MEP calls for a ban on Moneylenders using social media to decide on loans

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.”
MacManus said:
“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.”

Cllr Kenneth Flood Warns of Moneylenders at Christmas

kenneth-floodWith Christmas just around the corner and the costs involved on every family’s minds, a brochure from a money lending company delivered into the letter boxes in Drogheda has prompted Cllr. Kenneth Flood to issue a warning about exorbitant APR rates and dangers of using money lenders.

Commenting Cllr Flood said

“I checked the company’s website and saw that a tempting offer of €600 which would go a long way to covering the costs of Christmas had a massive APR rate of 187.2% which would mean a repayment of €780. While that may be legal it is nothing less than outrageous that rates like that can be charged.

It is also well documented that illegal money lenders have operated in Drogheda and I have heard of interest rates of 50% being charged. It can lead to a financial black hole that people find hard to get back out of.

I would urge anyone who is feeling the financial pressures of Christmas, if you must get access to credit, the best advice is to join your local Credit Union who may be in a position to help.”