Workers Are Trading Staggering Amounts of Data for 'Payday Loans' (wired.com) 33
Companies are offering interest-free advances to people with poor credit in exchange for detailed personal data. Wired: Tulloch [Editor's note: the anecdote character in the story] is one of a growing number of US workers turning their personal data over to private companies in exchange for paycheck advances, fueling an industry potentially worth up to $12 billion, by some estimates. In 2020, $9.5 billion in wages were accessed early, according to the research firm Aite-Novarica Group, up from $6.3 billion in 2019. These early payouts can be habit-forming; a 2021 report from the Financial Health Network found that more than 70 percent of pay advance users took out consecutive advances.
What Tulloch didn't know was that when he signed up for the app, a company called Argyle was retrieving the data that would be used to decide how much money to give him. It builds the technology that allows companies like B9 to extract a wealth of data from payroll accounts -- up to 140 data points. These can include shifts worked, time off, earnings and promotions history, health care and retirement contributions, even reputational markers like on-time rate or a gig worker's star rating and deactivation history. For every worker that uses its product, Argyle charges customers like B9 a fee, plus an additional monthly charge for continuous monitoring. This makes for a valuable data trove; it's further upstream than banking data, providing a fuller picture of a worker's earnings, deductions, and behavior. Some estimate that payroll data could be worth $10 billion. Argyle pegs it at 10 times higher.
Argyle is part of an emerging set of payroll data companies founded over the last four years to cash in on workers' personal information. They build secure connections between payroll providers like Paychex and businesses that want to access that data, like B9. Argyle acts like a courier, shuttling data from one account to another, the same way banking data is transmitted to apps like Venmo. Its competitors include Atomic, Pinwheel, Truv, and Plaid (which builds those bank integrations but recently began releasing payroll products). The data that workers provide can be used to underwrite financial products like loans, mortgages, insurance policies, and buy-now-pay-later apps; simplify direct deposit switching; or verify income and employment for apartment and job applications.
What Tulloch didn't know was that when he signed up for the app, a company called Argyle was retrieving the data that would be used to decide how much money to give him. It builds the technology that allows companies like B9 to extract a wealth of data from payroll accounts -- up to 140 data points. These can include shifts worked, time off, earnings and promotions history, health care and retirement contributions, even reputational markers like on-time rate or a gig worker's star rating and deactivation history. For every worker that uses its product, Argyle charges customers like B9 a fee, plus an additional monthly charge for continuous monitoring. This makes for a valuable data trove; it's further upstream than banking data, providing a fuller picture of a worker's earnings, deductions, and behavior. Some estimate that payroll data could be worth $10 billion. Argyle pegs it at 10 times higher.
Argyle is part of an emerging set of payroll data companies founded over the last four years to cash in on workers' personal information. They build secure connections between payroll providers like Paychex and businesses that want to access that data, like B9. Argyle acts like a courier, shuttling data from one account to another, the same way banking data is transmitted to apps like Venmo. Its competitors include Atomic, Pinwheel, Truv, and Plaid (which builds those bank integrations but recently began releasing payroll products). The data that workers provide can be used to underwrite financial products like loans, mortgages, insurance policies, and buy-now-pay-later apps; simplify direct deposit switching; or verify income and employment for apartment and job applications.
Yeah (Score:2)
You should see what is in a credit report. It's not just a credit score.
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They estimate everything - from basic demographics, to psycographics and consumer habits. This data is purchased by telcos and other companies to make decisions on equipment leases - but the data sets are sold quite openly, and we never consented to any of that sh*t.
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Equifax's "The Work Number" [theworknumber.com] employment/salary verification service is Opt-In at the employer level. Individual employees can opt-out of the program, but your employer will still send your payroll data to Equifax [fastcompany.com] and Equifax will still keep it. They just turn off your access to the verification service.
And Equifax pretty much does what they want with that data, up to and including losing control over it [krebsonsecurity.com].
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Exactly - especially the augmented data sets that are sold separately by Equifax et. al. They augment data sets at the person level, and at the houshold level. They estimate everything - from basic demographics, to psycographics and consumer habits. This data is purchased by telcos and other companies to make decisions on equipment leases - but the data sets are sold quite openly, and we never consented to any of that sh*t.
You know what's worst? If you manage to avoid giving them your data, you're screwed anyway. Because for them "NO DATA = ooooh, suspicious".
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It depends on what you mean by credit report. The big 3 agencies only report on debts and payments of debts, from which your score is wholly derived. At least on all the credit reports I've gotten from them.
But there are a bunch of smaller companies you've never heard of that provide their own credit reports that include much, much more. One of them flagged me for some reason last year when I was trying to cash my stimulus checks. I was told at the grocery store that they couldn't cash it, because of someth
Surely this can't be abused, right? (Score:2)
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Here is something else crypto can eliminate. All of the biz that is generated by abusing the banking system customer.
Ya, but crypto is currently busy eliminating peoples' money with all the fraud and theft ...
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A new Privacy Rapist is born (Score:2)
Wow. Just wow. (Score:2)
I worked with a guy who got into the payday loan cycle. It took a LONG time and a lot of pain to get free of those bloodsuckers. He was quite open about it, as he wanted to make sure no one else made his mistake.
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I was in the cycle about a decade ago. It's uncanny how well tuned it is. They extract enough to keep you coming back for more, but not enough to kill the host. I got bailed out by a family friend. My repayments were what I was paying in interest and the bailout was repaid in three months. It was a painful, humiliating and expensive lesson.
Just part of a larger problem (Score:2)
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The story isn't hard to find. [washingtonpost.com]
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These companies sound so benign on the surface (Score:2)
Reading Pinwheel's various blog posts and informational junkets gives one no clue that they are gathering so much data beneath the surface.
Makes me wonder if there are any Fintech offerings that aren't outright data grabs.
Payday Loans (Score:2)
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Sounds like a credit card...of which these people can't get one.
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Financial literacy (Score:2)
If only there was a place where everyone had to go that taught stuff. We could call it a school. Maybe they should make a mandatory finance class for 9th graders. Teach them how a check book works and what happens when you write bad checks. Teach them about credit and why it's important to not miss payments or be late, EVER! Teach them about household budgeting and living within your means, even when you don't have a lot.
Of course, if we taught all our children all these nifty things then we couldn't have t
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If free public schooling were proposed today, it wouldn't have a chance. ...and so forth.
"Why should I have to pay for someone else's kid to learn to read?"
"If people can't afford a tutor, they shouldn't have kids!"
"It's my right to keep my kid illiterate and ignorant!"
"Giving education away for free will hurt the rights of schools to make huge profits!"
"The free schools will teach them socialism!"
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Re:Financial literacy (Score:2)
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My mom was already teaching me money management in the 4th grade. Sure, it was very basic. I had a chart that hung on the refrigerator that listing every day of the week and all the chores I did. Every time I did a chore I put a star on the chart. Each week my chores essentially added up to $10. I knew if I wanted to have play money to do something on the weekends or after school, I had to do those chores. If I wanted to buy something that was more then $10, I had to save money!
As the child gets older you i
Bubble alert (Score:2)
just look at the number of companies now that are either fabulously wealthy, or seeking investors to make them wealthy on the bet they will get rich by gathering data on Americans and selling that data. It has yet to be demonstrated that an economy can be based on a population spying on each other and selling each other the info they have gained - all successful economies in history have previously needed most of the population to be involved in productive work.
A few years back there were lots of articles b
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all successful economies in history have previously needed most of the population to be involved in productive work
Trouble is that a lot of the productive work that meat sacks did a generation or two ago is now done by computers and robots. Banks used to employ armies of clerks to add up customers' accounts, car makers employed armies of welders and mechanics to build cars, and so on. What manual work does remain has been moved as far as possible from the West to Far East sweat shops, apart from some remnants like car maintenance and house wiring.
Now all those productive man-hours are not needed. We should all be
You gotta love Capitalism (Score:1)
Nothing to fear, citizens! (Score:2)
This is completely normal. Nothing at all to worry about, we have your best interests at heart. We've provided you a service and just want payment for services rendered, that's all ðY(TM)
So if you could just step this way, we can get your reproductive sample and cheek swab out of the way. Then we can go over your bank history, work history, school grades, attendance records...
I mean, you DO want to eat tonight, right? Of course you do! We're here to help!
And if you believe any of that, you should soak