Living in the Information Age has a number of advantages: we can avoid holiday crowds to shop from the comfort of our living rooms, and even ditch the commute to work remotely from home. But new stirrings in the credit card industry about future plans for collecting and using customer information have raised warning cries from a number of consumer advocates.
A recent article in Time magazine discusses plans that credit card issuer Visa has to gather more information from consumers to better target ads and evaluate credit card applicants. Sources report that the company has plans to collect information from a number of sources, including:
- Social networking websites, on which many consumers discuss their interests and post (even if indirectly) about their desires and spending habits.
- Credit bureaus, which they already use. This is why filing for bankruptcy has an effect on a filer’s ability to get credit in the future: credit card issuers can see that the bankruptcy took place for seven to ten years after it’s filed.
- Search engines, such as Google and Bing. This information could include not only shopping habits and interests but also information about everything a person researches, including words like “mortgage loan help” and “payday loans offers.”
- Insurance claims, which might paint a picture of a person’s health, driving habits, and more.
- DNA databanks. This last information source has caused the most uproar: information hardly gets more personal than a person’s genetic code, and the potential applications of such data are mind-boggling.
So how would credit card issuers use such a bevy of private data to their benefit? In a lot of ways, according to analysts. And many of them could seriously hurt consumers.
DNA or insurance claim data, for example, could reveal to credit card issuers a person’s health history or likelihood for developing a genetic condition. If that condition typically leads to significant medical expenses, the credit card issuer might deny the person credit—after all, many people end up discharging high medical bills in bankruptcy, and credit cards often get the same treatment in Chapter 7 cases.
Insufficient Legal Protections
What worries some analysts is that the U.S. currently has no laws in place to prevent such elaborate information gathering or denying credit on the basis of information like genetic code. As usual, the technology available has progressed far faster than the legislation designed to regulate that technology.
Another major concern? Identity theft and data breaches. It’s hardly uncommon to hear about data leaks and breaches in the news, but imagine the potential fallout if thieves had access to more than names and social security numbers.
At present, of course, neither Visa nor any other credit card issuer has such information on hand. But it could be a less distant future than we first imagine.