Future Tense

Outrage in Germany Over Plan To Mine Social Media To Determine Creditworthiness

Few countries value privacy as much as Germany. Now the country is up in arms after it was revealed that the country’s largest credit agency was planning to mine data from social media websites to judge creditworthiness.

Schufa had launched a project called “SCHUFALab@HPI” that would have entailed studying Facebook relationships and associations on websites like LinkedIn and Twitter in order to help measure a person’s financial status, according to confidential internal documents obtained by German broadcaster NDR. The credit agency had commissioned the Hasso Plattner Institute at the University of Potsdam to work on a proposal for the project, which NDR reported was to involve using Google-style “crawling techniques” to scour the web for data about credit applicants.

But when news of SCHUFALab@HPI broke on Thursday, Schufa was hit with a wave of opposition from across German society. Business newspaper the Handelsblatt called it an “extreme abuse.” Government consumer minister Ilse Aigner issued a sharp condemnation, saying, “Schufa cannot become the Big Brother of the business world.” The Social Democratic Party said it was a “horror scenario,” and the Greens accused it of being “unconstitutional.” Anonymous hackers also got in on the act, announcing “Operation Schufa,” which encouraged cyber attacks on the agency’s websites.

Despite initially defending the plan in a radio broadcast, Schufa now appears to be making a U-turn. German daily the Potsdamer Neueste Nachrichten today reported that the Hasso Plattner Institute and Schufa “have stopped their Facebook project.”

Germany has a reputation for its record defending privacy—this instance being a prime example. But even if the SCHUFALab@HPI project is dead as a result of the backlash, the question is: How many others like it are not? Most credit agencies operate under intense commercial secrecy, and the methods they use are not widely known.

Given the amount of time we now spend online, it seems highly likely that increasing numbers of credit agencies will begin using—or pursuing plans to implement—methods of social media analysis. In some countries it is already happening transparently and with the prior knowledge of the credit applicant. As Mashable reported earlier this week, for instance, a U.S.-funded company operating in the Philippines and Colombia is gauging a person’s creditworthiness by assessing sites like Facebook, Twitter, and LinkedIn to measure “online reputation.” Whether this is a reliable way to judge the financial status of a person remains open to debate. Either way, it is a trend that looks set to continue.