Borrower backlash against social media spies
Press Release - 31 March 2014
- Research reveals borrower concern about lenders scouring social media profiles
- Three quarters (70%) are angry or very uncomfortable about this invasion of privacy
- 77% believe lenders cannot make accurate decisions based on social media profiles
- Half (48%) would consider deactivating their social media profile as a result
Prospective borrowers are disgusted at reports that lenders, such as Wonga, are using social media as a means to make a decision on whether to lend to them from Amigo Loans reveals a whopping 70% of borrowers - over a third (36%) say it makes them angry, labelling it untrustworthy and an invasion of privacy, while a further third (34%) say it makes them very uncomfortable. Research aren’t happy about this practice.
Research from the UK’s largest guarantor lender reveals invasion of privacy is not the only concern. It is also a matter of fairness when it comes to the criteria being used to approve loans, as over three quarters (77%) of borrowers believe lenders cannot make an accurate decision on whether to lend based on a person’s social media profile.
What’s more, almost half (48%) of borrowers would consider deactivating their social media profiles as a result of this breach of privacy. A third (34%) say their privacy is more important to them than social networking, while over one in ten (14%) say their credit score is more important than having a special media presence.
Personal photographs (14%) top the list of personal information borrowers are most worried about lenders seeing, followed by status updates (11%) and location (11%) in joint second place. One in ten (8%) are concerned about the comments friends leave on the walls of their social media profiles.
Top 5 social media information borrowers are most worried about lenders seeing:
| Social media info | Percentage of borrowers that are worried |
|---|---|
| Photos | 14% |
| Status Updates | 11% |
| Location | 11% |
| Comments friends have left on their wall | 8% |
| Number of friends | 3% |
Women are the most concerned of the sexes when it comes to lenders scouring social media; 74% of women say this makes them angry and uncomfortable, compared to a lower 63% of men. Generational differences are also apparent, with just 30% of 18-24 year olds saying they would deactivate their social media profiles to protect their privacy, compared to a much higher 41% of over 55’s.
James Benamor, CEO of Amigo Loans, commented:
We already know that lenders like 118 are asking people how many Facebook friends they have, there’s a danger lenders will start judging borrowers on how valuable they are to them for future marketing and products. It’s no wonder borrowers aren’t happy about this. Lenders should only be judging if someone is credit worthy by their ability to pay a loan back.
This use of social media is also a worrying sign of further exclusion of those already marginalised by traditional credit scoring. The term ‘mainstream credit’ is already becoming a contradiction, with an increasing number of borrowers being forced to look elsewhere because the banks are turning their backs on them. We firmly believe that reverting back to the old-fashioned approach of actually speaking to potential borrowers is how lending decisions should be made.
