Consumer credit surveillance

Abstract

This chapter reviews the development of consumer credit surveillance in the United States from the nineteenth century, as the original problem of information asymmetry in consumer lending gave rise to consumer data registries, a process led by merchants, not by financial institutions. Regulations in the 1970s addressing discrimination and data privacy limited consumer credit surveillance, but lately two developments reversed this trend. Aided by banking deregulation and advances in information technology, the use of credit scores expanded beyond lending, while the kind of data used to calculate scores has also widened, turning the credit score into a general measure of character. This results in a pervasive new system of consumer surveillance and control that turns the original information asymmetry upside down, favoring lenders and other corporate actors, including the state, at the expense of consumers. The European Union is trying to limit this system while a full version is currently piloted in China.