Nicole Keplinger, 22, had long seen ads on Facebook promising financial relief, but she always ignored them and assumed that they were scams. Keplinger was drowning in student debt after obtaining a worthless degree from the for-profit Everest College, whose parent corporation, Corinthian Colleges Inc., had recently collapsed under accusations of fraud and predatory lending. But when an offer arrived in her e-mail inbox in April—“Cut your student loan payment or even forgive it completely!”—she thought it seemed more legitimate than the rest, so she called the number.
The person on the other end was aggressive. “They wanted my banking information, my Social Security number, my parents’ number and their information. I was like, ‘Wait a minute,’” Keplinger recalled. Even after she said that she lived on a fixed income (on disability due to a kidney transplant), the telemarketer kept up the pressure. “They said I needed to get a credit card. I don’t know if they were going to take money off it or what… but why do I need to get a credit card if I’m trying to reduce my student loans?”
Keplinger lied and said she’d call back, but not everyone gets away. If she disclosed her bank information, her loans most certainly would not have been cut or forgiven. At best, she would have been charged a large fee for something she could do herself: get on government repayment programs such as forbearance or deferment. At worst, she might have had the money debited each month from her bank account without any benefit provided in return, or been ensnared by a “phantom-debt collector”—a distressingly common racket that involves telling people they owe phony debts and scaring them into paying. It’s the perfect ploy to attempt on people who have already been preyed upon by unscrupulous outfits like Corinthian and who, having been misled and overcharged, are understandably confused about how much money they owe. At the same time, the fact that Keplinger was e-mailed in addition to seeing ads on Facebook suggests that her information was in the hands of a “lead generator,” a multibillion-dollar industry devoted to compiling and selling lists of prospective customers online.
Welcome to a new age of digital redlining. The term conjures up the days when banks would draw a red line around areas of the city—typically places where blacks, Latinos, Asians, or other minorities lived—to denote places they would not lend money, at least not at fair rates. “Just as neighborhoods can serve as a proxy for racial or ethnic identity, there are new worries that big data technologies could be used to ‘digitally redline’ unwanted groups, either as customers, employees, tenants, or recipients of credit,” a 2014 White House report on big data warns.
Thus, rather than overt discrimination, companies can smuggle proxies for race, sex, indebtedness, and so on into big-data sets and then draw correlations and conclusions that have discriminatory effects. For example, Latanya Sweeney, former chief technologist at the Federal Trade Commission, uncovered racial bias on the basis of Google searches: black-identifying names yielded a higher incidence of ads associated with “arrest” than white-identifying names. It’s discrimination committed not by an individual ad buyer, banker, or insurance broker, but by a bot. This is likely what happened to Nicole: Facebook’s huge repository of data has strong indicators of users’ socioeconomic status—where they attend school, where they work, who their friends are, and more—and the company targets them accordingly. In May, Facebook and IBM announced a partnership that will result in the two tech giants combining their vast data troves and analytics in order to achieve “personalization at scale.”