Facebook’s New Patent Allows Lenders to Determine Credit Approval Through Average Credit Rating of Facebook Friends  

The United States Patent and Trademark Office (“USPTO”) recently granted Patent No. 9,100,400 titled “Authorization and Authentication Based on an Individual’s Social Network” to Facebook.  The patent claims a system and method for helping filter spam emails and offensive content, as well as allowing lenders to use one’s social media acquaintances and habits to determine a credit approval.

The patent uses degrees of separation between individuals in a social network as well as white, grey, and black lists to authorize activities and authenticate individuals.  The patent illustrates the scope of the invention by providing four examples which demonstrate the purpose of the technology and one of which specifically relates to credit approval.

In the specification, the patent stated:

“In a fourth embodiment of the invention, the service provider is a lender. When an individual applies for a loan, the lender examines the credit ratings of members of the individual’s social network who are connected to the individual through authorized nodes. If the average credit rating of these members is at least a minimum credit score, the lender continues to process the loan application. Otherwise, the loan application is rejected.”

However, the Equal Credit Opportunity Act imposes strict guidelines in terms of what information creditors can use to determine loan approval so Facebook will need to show that its patented technological method adheres to federal law.

It is uncertain how Facebook intends on implementing the technology protected under this patent.