Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy (35 page)

Credit card companies such as Capital One:
Emily Steel and Julia Angwin, “On the Web’s Cutting Edge, Anonymity in Name Only,”
Wall Street Journal
, August 4, 2010,
www.wsj.com/news/articles/SB10001424052748703294904575385532109190198
.

“good credit scores are sexy”:
Website
CreditScoreDating.com
, accessed January 10, 2016,
http://creditscoredating.com/
.

Society for Human Resource Management:
Gary Rivlin, “The Long Shadow of Bad Credit in a Job Search,”
New York Times
, May 11, 2013,
www.nytimes.com/2013/05/12/business/employers-pull-applicants-credit-reports.html
.

A
2012
survey on credit card debt:
Amy Traub, “Discredited: How Employment Credit Checks Keep Qualified Workers Out of a Job,”
Demos
, February 2013,
www.demos.org/sites/default/files/publications/Discredited-Demos.pdf
.

the single biggest cause of bankruptcies:
Christina LaMontagne, “NerdWallet Health Finds Medical Bankruptcy Accounts for Majority of Personal Bankruptcies,”
NerdWallet
, March 26, 2014,
www.nerdwallet.com/blog/health/medical-costs/medical-bankruptcy/
.

white households held on average:
Tami Luhby, “The Black-White Economic Divide in 5 Charts,”
CNN Money
, November 25, 2015,
http://money.cnn.com/2015/11/24/news/economy/blacks-whites-inequality/
.

only
15
percent of whites:
Rakesh Kochhar, Richard Fry, and Paul Taylor, “Wealth Gaps Rise to Record Highs Between Whites, Blacks, Hispanics: Twenty-to-One,” Pew Research Center, July 26, 2011,
www.pewsocialtrends.org/2011/07/26/wealth-gaps-rise-to-record-highs-between-whites-blacks-hispanics/
.

ten states have passed legislation:
National Conference of State Legislatures, “Use of Credit Information in Employment 2013 Legislation,” NCSL website, updated September 29, 2014,
www.ncsl.org/research/financial-services-and-commerce/use-of-credit-info-in-employ-2013-legis.aspx
.

The Federal Trade Commission reported:
Federal Trade Commission, “In FTC Study, Five Percent of Consumers Had Errors on Their Credit Reports That Could Result in Less Favorable Terms for Loans,” FTC website, February 11, 2013,
www.ftc.gov/news-events/press-releases/2013/02/ftc-study-five-percent-consumers-had-errors-their-credit-reports
.

Mississippi’s attorney general:
Gretchen Morgenson, “Held Captive by Flawed Credit Reports,”
New York Times
, June 21, 2014,
www.nytimes.com/2014/06/22/business/held-captive-by-flawed-credit-reports.html
.

a Philadelphian named Helen Stokes:
Joe Palazzolo and Gary Fields, “Fight Grows to Stop Expunged Criminal Records Living On in Background Checks,”
Wall Street Journal
, May 7, 2015,
www.wsj.com/articles/fight-grows-to-stop-expunged-criminal-records-living-on-in-background-checks-1430991002
.

in a bucket of people:
Office of Oversight and Investigations, “A Review of the Data Broker Industry: Collection, Use, and Sale of Consumer Data for Marketing Purposes,” Committee on Commerce, Science, and Transportation, December 18, 2013,
http://educationnewyork.com/files/rockefeller_databroker.pdf
.

an Arkansas resident named Catherine Taylor:
Ylan Q. Mui, “Little-Known Firms Tracking Data Used in Credit Scores,”
Washington Post
, July 16, 2011,
www.washingtonpost.com/business/economy/little-known-firms-tracking-data-used-in-credit-scores/2011/05/24/gIQAXHcWII_story.html
.

a butterfly’s diet was “Kosher”:
Stephen Baker, “After ‘Jeopardy,’ ”
Boston Globe
, February 15, 2011,
www.boston.com/bostonglobe/editorial_opinion/oped/articles/2011/02/15/after_jeopardy/
.

labeled them as gorillas:
Alistair Barr, “Google Mistakenly Tags Black People as ‘Gorillas,’ Showing Limits of Algorithms,”
Wall Street Journal
, July 1, 2015,
http://blogs.wsj.com/digits/2015/07/01/google-mistakenly-tags-black-people-as-gorillas-showing-limits-of-algorithms/
.

Facebook, for example, has patented:
Robinson Meyer, “Could a Bank Deny Your Loan Based on Your Facebook Friends?,”
Atlantic Monthly
, September 25, 2015,
www.theatlantic.com/technology/archive/2015/09/facebooks-new-patent-and-digital-redlining/407287/
.

American Express learned this the hard way:
Ron Lieber, “American Express Kept a (Very) Watchful Eye on Charges,”
New York Times
, January 30, 2009,
www.nytimes.com/2009/01/31/your-money/credit-and-debit-cards/31money.html
.

Douglas Merrill’s idea:
Steve Lohr, “Big Data Underwriting for Payday Loans,”
New York Times
, January 19, 2015,
http://bits.blogs.nytimes.com/2015/01/19/big-data-underwriting-for-payday-loans/
.

On the company web page:
Website
ZestFinance.com
, accessed January 9, 2016,
www.zestfinance.com/
.

A typical $
500
loan:
Lohr, “Big Data Underwriting.”

ten thousand data points:
Michael Carney, “Flush with $20M from Peter Thiel, ZestFinance Is Measuring Credit Risk Through Non-traditional Big Data,”
Pando
, July 31, 2013,
https://pando.com/2013/07/31/flush-with-20m-from-peter-thiel-zestfinance-is-measuring-credit-risk-through-non-traditional-big-data/
.

one of the first peer-to-peer exchanges, Lending Club:
Richard MacManus, “Facebook App, Lending Club, Passes Half a Million Dollars in Loans,”
Readwrite
, July 29, 2007,
http://readwrite.com/2007/07/29/facebook_app_lending_club_passes_half_a_million_in_loans
.

received funding a year later:
Lending Club, “Lending Club Completes $600 Million SEC Registration and Offers New Alternative for Consumer Credit,” Lending Club, October 14, 2008,
http://blog.lendingclub.com/lending-club-sec-registration/
.

less than $
10
billion in loans:
Peter Renton, “Five Predictions for 2015,” Lend Academy, January 5, 2015,
www.lendacademy.com/five-predictions-2015/
.

Executives from Citigroup:
Nav Athwal, “The Disappearance of Peer-to-Peer Lending,”
Forbes
, October 14, 2014,
www.forbes.com/sites/groupthink/2014/10/14/the-disappearance-of-peer-to-peer-lending/
.

Wells Fargo’s investment fund:
Maureen Farrell, “Wells Fargo Is a Big Winner in Lending Club IPO,”
Wall Street Journal
, December 12, 2014,
http://blogs.wsj.com/moneybeat/2014/12/12/wells-fargo-is-a-big-winner-in-lending-club-ipo/
.

the biggest tech IPO:
Jeremy Quittner, “The 10 Biggest IPOs of 2014,”
Inc.
, December 19, 2014,
www.inc.com/jeremy-quittner/biggest-ipos-of-2014.html
.

It raised $
870
million:
Neha Dimri, “Update 1—Online Lender LendingClub Profit Beats Street as Fees Jump,”
Reuters
, May 5, 2015,
www.reuters.com/article/lendingclub-results-idUSL4N0XW4HO20150505
.

a report in
Forbes
:
Athwal, “Disappearance of Peer-To-Peer Lending.”

CHAPTER 9

Hoffman, a German:
Megan Wolff, “The Myth of the Actuary: Life Insurance and Frederick L. Hoffman’s ‘Race Traits and Tendencies of the American Negro,’ ”
Public Health Reports
121, no. 1 (January/February 2006): 84–91,
www.ncbi.nlm.nih.gov/pmc/articles/PMC1497788/
.

Insurance companies as well as bankers:
Gregory Squires, “Insurance Redlining: Still Fact, Not Fiction,”
Shelterforce
79 (January/February 1995),
www.nhi.org/online/issues/79/isurred.html
.

the Fair Housing Act of
1968
:
Fair Housing Laws and Presidential Executive Orders, US Department of Housing and Urban Development, accessed January 9, 2016,
http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/FHLaws
.

Insurance grew out of actuarial science:
Chris Lewin, “The Creation of Actuarial Science,”
Zentralblatt für Didaktik der Mathematik
33, no. 2 (April 2001): 61–66,
http://link.springer.com/article/10.1007%2FBF02652740
.

John Graunt:
Margaret De Valois, “Who Was Captain John Graunt?,”
Actuary
, September 2000, 38–39,
www.theactuary.com/archive/old-articles/part-3/who-was-captain-john-graunt-3F/
.

the first study of the mortality rates:
John Graunt,
Bills of Mortality
(1662),
www.neonatology.org/pdf/graunt.pdf
.

a
6
percent death risk:
De Valois, “Who Was Captain John Graunt?”

researchers at Consumer Reports:
“The Truth About Car Insurance,”
Consumer Reports
, Special Report, accessed January 10, 2016,
www.consumerreports.org/cro/car-insurance/auto-insurance-special-report/index.htm
.

And in Florida, adults with clean driving records:
Jeff Blyskal, “Secrets of Car Insurance Prices,”
Consumer Reports
, July 30, 2015,
www.consumerreports.org/cro/magazine/2015/07/car-insurance-prices/index.htm
.