Introduction

This chapter considers how information on consumers is used in credit and insurance. It is not a chapter on privacy concerns, but on how data use can affect the availability of these services and how this may produce unfair outcomes.

Before considering the negative effects, it is worth pointing out that data manipulation is fundamental to modern, mass market credit and insurance. Credit and insurance share the fact that data are collected on millions of individuals to define the characteristics of those who are creditworthy or those who are an acceptable insurance risk. Data belonging to an individual are then set against these definitions, in order to decide whether and on what terms to grant credit or insurance. Before electronic collection and manipulation of data developed, many consumers were not able to buy credit or insurance at all (NCC, 2004).

Nevertheless, increasing sophistication in data manipulation means that lenders and insurers can segment their market and this may result in some consumers being excluded or only offered services on unfavourable terms.

This chapter examines categories of problems outlined by 6 and Jupp (2001). They point out that whereas in the past concern has been for people excluded from information, there is an additional concern that the use of information technology might itself be an engine of exclusion. They set out three categories of risk.

The first is that “organisational pressures … may lead organisations to identify and focus on only the most profitable customers” (6 and Jupp, 2001, p 42), thus depriving less profitable customers of services that are essential to everyday life. They use geographical illustrations for this, citing the closure of bank branches in areas of deprivation and the use of data to site supermarkets where they will be accessible to more profitable customers. Discrimination may not be unjust in individual terms and may be based on significant characteristics of those excluded that are commercially justifiable. But it may have socially undesirable consequences. In some circumstances credit and insurance are seen as quasi ‘essential services’. In these cases, consumers’ lack of access can be seen as unfair in the context of needs. I call this unfair exclusion.