Pathetic!!! The idea of judging someone by the company they keep, particularly on social media, is not only unfair! Facebook patented a technology that allows lenders to use a borrower’s social network to determine whether he or she is a good credit risk.

it’s a sure fire way to put borrowers into high interest loans and potentially ruin millions of people’s finances.

The patent states that “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,”

How it would work: You apply for a loan and your would-be lender somehow examines the credit ratings of your Facebook friends.

The prospect of lenders having access to social accounts and the data behind that is terrifying because it opens every Facebook member up to that very prospect. Sure, the Equal Credit Opportunity Act strictly regulates what criteria creditors can use when deciding on a loan — things like income, expenses, debts and credit history determine creditworthiness, but weren’t mortgages and interest rates highly regulated too? Big banks, and for that matter, big business, have proven in incidents too numerous to count that they care little for regulations or laws. If they’re given the opportunity to tilt the wheel in their favour, there’s very little to stop them.

It’s only a matter of time before this technology is made available and used by lenders, human resource departments, and schools to determine the moral character of an applicant based on an algorithm — an algorithm that can be tweaked and adjusted to suit the user’s needs, social views, political affiliations, etc.

Is there anyone freaking? How clean is your list of your friends? If someone’s wall and time line feed is filled with recovered alcoholics who have changed their lives, foreclosure victims who have fought to keep their homes, left leaning political junkies, and tea bagger memes we find funny, shocking, and obscene. We discuss and comment on low wages, campaign finance, Planned Parenthood, women’s health, abortion rights, civil rights, and voter rights, to name a few. Is an algorithm going to get the subtle nuance of that conversation or simply label those people trouble makers, deadbeats, and losers.

It’s not clear if Facebook would ever try to use the patent for lending, or how exactly it would work. How practical is it for a lender to try to access all the necessary information it needs from your Facebook friends?

What is terrifying is because the prospect and potential that this represents means a world without discussion and without ideas. It means a world in which we have to be careful of what we say for fear of not getting that loan, job, or education.

The company applied for the patent in 2012, after buying it in a bundle of patents from Friendster for $40 million five years ago.

There is also a federal law, the Equal Credit Opportunity Act, that strictly regulates what criteria creditors can use when deciding on a loan — things like income, expenses, debts and credit history determine creditworthiness.

“It’s nothing to lose sleep over for people with decent credit history, but it could potentially affect those who are borderline to begin with,” said Greg McBride, chief financial analyst for Bankrate.com.

The patent was uncovered by Mikhail Avady, founder of SmartUp, a legal technology company in Atlanta.

Facebook also patented a technology that could be used for a number of things. It could help filter out spam email and offensive content. Or it could improve searches.

Keywords: Patent, Facebook, bank, loan, and friend list