Ever wondered how your online activity could affect your ability to get credit? I’m Anouk Ruhaak, Mozilla Fellow in Residence working on data stewardship, and in this episode of Mozilla Explains, I explain Data Brokers, and the surprising ways social media might affect your finances. You can learn more in the video below, or read on.
While we shop, chat, or read the news online, we leave behind a trail of data: tweets, posts, pictures, the number of times we consulted a medical site, signed up for a language course, or booked a plane ticket.
Some companies exist for the sole purpose of collecting all the data you leave online, and then sell it on to whomever pays. These companies are called data brokers.
They follow you around as you go from one website to another and store all the information you leave behind. On their own, each data point says very little about you. But when you combine all that information, it suddenly becomes possible to gain insight into your political beliefs, your religion, gender, sexual preferences, financial status, and even whether you are about to get married or want to get pregnant. And that’s exactly what happens: data brokers use the information they collect to build extensive, although often incorrect, profiles.
How does that affect your finances?
You want a loan? The bank would like to know how likely you are to repay that loan. That seems fair. But how do they decide that?
In some countries, loan providers can only look at your official credit score, which is based on your financial history: how much money you have in your bank account, whether you have outstanding loans, and so on. Credit scores aren't perfect, but at least they're based on information relevant to the question at hand: whether you could repay a loan.
But what if you don't have an extensive financial history, or you live in a country without clear rules about how credit scores can be calculated?
In those cases your credit score could be based on just about anything. What you post on social media, whether you recently visited a doctor, or whether or not you live in a wealthy neighbourhood. Suddenly, your most recent Google search history, or your latest post on TikTok could influence whether you can get that loan.
And how do loan providers obtain that information about you? Exactly, data brokers.
This isn’t hypothetical – there are loan providing apps in India doing exactly this.
Even if you’re careful about what you post on social media, it may not be enough. Not everything about you online is correct and neither is the data collected by data brokers. They may have found a post by someone with the same name and assumed it was you. Or someone may have said something about you online that was not true. Unfortunately, you’re not likely to know this and are unable to correct these errors.
And it gets worse. A lot of these decisions are made by machines that use complicated algorithms to decide whether or not you are eligible for a loan. So complex that it’s often impossible for a human to understand how they arrived at their decision. Which means it’s difficult to know whether the decision was fair and based on relevant information.
The convoluted nature of these algorithms means it’s easy for bias or outright discrimination to seep in and stay hidden. In many countries it’s illegal to discriminate on the basis of characteristics like race, age, gender or religion. But companies can (and do) sneak in discrimination through the back door by using proxies for these characteristics. For example, your choice of social media platform reveals a lot about your age.
Finally, if an algorithm decides that you are not eligible for a loan, that information is stored as well, and being rejected for a loan can lower your credit score, thereby reducing your chances of getting a loan in the future.
So to recap: even when your online behavior is exemplary (whatever that means), loan providers may make a decision based on data that they have bought from data brokers that is inaccurate. Their algorithms may be biased against you getting a loan based on your age, sex, or the color of your skin. And if they deny you a loan, that could make it harder for you to get a loan in the future.
What can you do about this?
Start by researching and knowing your rights.
How credit-worthiness is calculated varies dramatically by location. Countries like the US have laws that dictate what credit scores can be based on. In some countries, you will have the right to have your data protected from unauthorised sales to third parties. Or you may have the right to inspect what data a data broker holds on you. If an algorithm has decided to deny you a loan, in some countries you have the right to know how the machine reached that decision. Knowing your rights, and who to contact when they are violated, can help you appeal decisions you don’t agree with.
But what if your rights aren’t well protected in the country you live in? Many organisations around the globe are working hard to change this situation. Examples include AccessNow, which works globally, as do Privacy International and Mozilla. All have frequent campaigns you can join or petitions you can sign. Other examples include the Electronic Frontier Foundation in the US, EDRi in Europe, CIPESA in East and Southern Africa, or Derechos Digitales in Latin America.