There’s a really interesting article in this past week’s Business Week about the value of friendships on Facebook and Twitter in a very economic sense. Companies are looking at everything from whether your friends are more likely to click on ads served to them when they visit your facebook pages (yes, but the rate of clicks is still very small) to whether or not you should be considered a better credit risk if you friends have higher credit scores.
I thought this fact- whether your friends credit scores should influence decisions made about you- was fascinating. My connections to various online group of friends varies. I have close, personal friends mixed in with a bunch of acquaintences, to people I don’t know at all. While you could probably triagulate my Facebook, Twitter, and LinkedIn connections and figure out who I am the closest to, when it comes to money issues, I am not sure how much influence I have over my online friends. Does my behavior influence whether they will pay back their debts? I know I feel strongly about being careful with your money, not overextending yourself, and generally being fiscally conservative, but how much influence does this have on someone like LeeAnn Hansen from NPR who is one of my Twitter friends? And if I started to follow celebrities, should Oprah’s credit rating affect mine or vice versa?
Moreover, if I have a good credit score, or even perhaps the perception of having a good credit score is enough in this smoke and mirrors world, is this something we’ll see people start to use as link bait? “Follow me and your chances of getting a car loan will improve”?
I can see a whole new generation of weird loans being made because people are making the assumptions that online friendships work as well as real world ones, when they are often an entirely different animal. But then again, there was the article in the New York Times citing a study of risk from Canadian Tire, a company that issues its own credit cards, showing that people who bought things like premium bird seed were much better credit risks than people buying chrome skull car accessories. Apparently the brands we buy and the stuff we buy is allowing companies to develop a portrait of us that lets them know how good a customer we are, what rates we deserve, as well as spot fraud.
For example, a few years ago, I got a phone call from two of my credit card companies first thing in the morning, suspecting fraud. It turns out, the night before, two of my credit cards were lifted out of my purse while I was at my son’s karate class. I hadn’t yet noticed, because I hadn’t needed to open my wallet since we returned home from class the night before. But my credit card issuers knew, because of their data on me, that I probably was not the person charging expensive sunglasses at the Mall the night before. I was glad they were so on top of their game and could cancel the cards right away. (I secretly also thought it was slightly sad that they knew it couldn’t be me because I’m never at the mall that late, ever. I lead a boring life, and they all know it!) And despite the feelings of violation, the hassle with the fraud claims and getting a police report, I was glad the companies were on my side and protecting me from others using my name and credit without my permission.
The knowledge credit card companies and others have about us makes the things that George Orwell imagined in his book, 1984, look benign. What’s curious is how we are all adjusting to the fact that others may know more about us, in a meta sense, than we do about ourselves. Like a collection of online therapists, our friends and business associates and financial institutions will know, long before we do, whether or not we will pay our debts, how we feel, whether we will go on a diet, and thus know what and when to market to us. Can the world envisioned in Minority Report be very far away? How much of our actions can people predict and how much can we really surprise them? How much can we fake good morals or credit by engaging in the “good” behaviors versus the more frowned upon ones?
For conspiracy theorists, this is certainly evidence that cash may be a better idea than credit. But even in that scenario, you don’t get any credit for the “good” things you buy, or the bad. But one or two messages are clear- if you do decide, (applying the Canadian Tire data) to go to a bar named Sharx in Montreal or buy Chrome Skull car accessories, play cash. But buy that premium bird food and snow roof rake on credit to maximize your credit score.