It might be time to purge your Facebook friends list of people you don’t trust. Facebook could soon take the old adage ‘you can judge a man by the company he keeps’ to the next level. A patent acquired by Facebook states that users could be denied a loan based on the credit-worthiness of their connections online.
Facebook bought a bundle of patents from Friendster for $40 million in 2010. The patent in question is intended to prevent spam, however it also contains the following paragraph:
In a fourth embodiment of the invention, the service provider is a lender. When an individual applies for a loan, the lender examines the credit ratings of members of the individual’s social network who are connected to the individual through authorized nodes. If the average credit rating of these members is at least a minimum credit score, the lender continues to process the loan application. Otherwise, the loan application is rejected.
Another way: users could be denied a loan because their Facebook friends have defaulted on theirs.
Facebook users have become used to the idea that Facebook is selling their details to advertisers. But when a user sees targeted advertising, the choice to buy still lies with them.
A patent like this could have a serious impact on Facebook user’s lives by affecting their credit-worthiness and blocking access to money – all without them even knowing it’s happening. If Facebook used the patent in this way, users might be denied loans from traditional lenders, which could force them to turn to payday lenders and other riskier means.
Facebook declined to comment on how such a patent would be used. But its existence marks a departure from the traditional ways of determining credit-worthiness by looking at a person’s credit history and how much debt they owe.