The three major credit bureaus in addition to other companies are increasingly using social media for business purposes. A wealth of publicly available social data cross-referenced with traditional sources like bank records and credit card statements means companies have more efficient tools to detect fraud and other malicious activities.
Reviews left on Yelp, tagged photos in a Facebook profile and comments on a blog using a matching e-mail address all add up to a network of connected information about an individual. "We are investing a lot in how can we use unstructured data that is sitting out there in social media that can help us understand a little more about identity," Rajib Roy, president of Equifax Identity and Fraud Solutions, said in an interview with Bloomberg.
Social media has helped detect red flags. If a business claims to be a hairdresser in Pittsburgh, for example, WePay can match the phone number from its application to the one listed on Yelp, see consumer reviews, and check that the business's e-mail matches the one it uses on its Twitter account. WePay can also look at the length of time the business has had a presence on Yelp, Twitter and Facebook to verify its legitimacy.
Privacy concerns have become heightened resulting in two government agencies, The U.S. Consumer Financial Protection Bureau and Federal Trade Commission, to examine how debt collectors use Facebook and Twitter to contact debtors. It's one thing to use publicly available information to make contact with a borrower but it's another thing entirely when that information is used to make lending decisions.
As public sharing of personal information becomes more ubiquitous, it's important to remember that it's not just friends and family who have access to your data. Many individuals are willing to trade privacy for convenience but only up to a certain extent.