Your credit score is a powerful tool that businesses use to measure your creditworthiness. However, big data could be ranking you on more than just your credit.
Your credit score is based upon credit history and your ability to pay back debt and loans. Companies use credit scores to determine if you are financially responsible enough to purchase a car, home, etc. According to the article, “Big Data is Secretly Scoring You” by Melanie Hicken, a new report suggests that “Data brokers, analytics firms and retailers are creating hundreds of “secret” consumer scores that rank you on everything from the likelihood you will keep your job to how likely you are to commit fraud.” Businesses can even predict how likely you are to finish a prescription from a doctor.
The data is being sold to businesses and law enforcement to promote new products and investigate crimes without consumers’ permission. Most consumers aren’t even aware it’s happening. For example, a consumer could receive a coupon without knowing it came from purchased personal data.
Consumers do not have access to this personal data and have no way of finding out how it will affects their every day lives. Certain ‘secret scores’ can be used to help consumers in a positive way. However, consumer protection groups believe these big data scores are a breach of personal privacy and are lobbying for government supervision.
Read some of the consumer scores in an excerpt from the article.
Consumer profitability score: Using factors like your income, one company sells a score which predicts how likely you will be to pay your debts. The higher your score, the more likely you are to be a “profitable” customer (and a target of marketers).
Churn score: Many companies, such as wireless carriers and cable companies, create scores that predict how likely you are to take your business to a competitor. Get deemed a flight risk, and you may be offered a better deal. On the flip side, get labeled a stable customer and you may end up paying higher rates.
Job security score: One company sells a score that uses employment and unemployment data, economic trends and forecasts to predict the probability that you will lose your job, and as a result not be able to pay your bills.
Banks sometimes use these lists in order to limit their losses, according to the report.
Medication adherence score: Do you always follow your doctor’s orders? Or do you skip a pill here and there? One firm sells a score that predicts the likelihood you will follow a prescription plan, based on factors ranging from age to home ownership, that is designed to let pharmacies and insurers know when a patient is at risk and needs a medication reminder.
Fraud scores: Widely used by retailers, credit card issuers and other companies, fraud scores indicate whether a consumer may be posing as someone else or attempting to perpetuate a fraud of some sort.
Custom scores: Some retailers create their own custom scores using sophisticated analysis of their massive databases of customer purchases and demographic information. The most famous example: Target’s pregnancy predictor score, which used a consumer’s shopping history to predict that she was pregnant even before she had told family members.
Law enforcement scores: A variety of government scores are used for safety, anti-terrorism and other law enforcement purposes, but very little is known about how this information is used, the report stated.