Saturday, January 31, 2009

Big Brother is watching you: Maybe your electric utility, maybe your credit card companies, maybe your mortgage lender

I recall, back in the early 1970s, writing a log capturing utility to track programmer productivity, and it was called “Big Brother” or “BigBR”. (That was its actual name as an executable.) Now, we have big brother again, in a couple of areas, both reported in the Saturday, Jan. 31 New York Times.

On the front page Leslie Kaufman has “Utilities Turn Their Customers Green, With Envy,” link here. In the Sacramento CA area, the Municipal District sends a statement to each homeowner comparing the home’s electrical use to those of “efficient neighbors” and “all neighbors.” The intention is to stimulate energy conservation and the purchase of EnergyStar appliances.

Then on the first page of Saturday’s Business Day, Ron Lieber has a story about monitoring consumption habits as part of a credit score. The story is “American Express Kept a (Very) Watchful Eye on Charges”, link here. Apparently American Express was thought to keep track of “blacklisted” merchants used by cardmembers. The theory was that people who spent money at certain places (bars, massage parlors) are less reliable than ordinary people. Furthermore, it kept track of items like what company owns your mortgage, and how stable your employer is. If too much of this added up unfavorably, your credit limit could be reduced. Another company reported, a subprime lender, to have reduced credit lines based on merchant use was CompuCredit.

Credit scores apparently can be affected by these practices. I wonder if eventually it will be affected by negative-looking Myspace pages or blogs!

There is more about this problem, especially with respect to American Express, at the blog “Newcreditrules”.

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