Before you make or accept that next Facebook friend request, you might want to verify that your potential friend has good credit. Because of a patent on software technology obtained by Facebook, your own good credit just might eventually depend on it. Apparently the patent was part of a package that the social media giant bought from Friendster several years ago.
Although the technology could be used to improve internet searches or filter out spam or other unwanted content, the concern is that it would also allow a lender to examine a loan applicant’s network of social contacts and decide whether to deny the loan based on the presence of friends who lack good credit. In other words, loan underwriting would potentially penalize someone through guilt by association.
Facebook has not yet commented on this new technology, and it is not clear whether it will be used by lenders to evaluate loan applicants. However, a peer-based credit system has already been proposed by a company known as Lenddo. This Hong Kong company would allow people without traditional means of proving good credit to instead utilize their social networks to do so, but appears to be an optional alternative whereas the Facebook system might not be.