What is a “Secret Consumer” Score?
In case you haven’t noticed, we’ve moved away individual risk assessment and rely on analytics known as “scoring.” We’ve become accustomed to it in the lending environment but it is used in so many other places. In fact, there really isn’t anything you do that cannot be modeled in some form or fashion. And in almost every scenario the scoring systems used are secret and are not accessible by consumers.
Insurance scores, medical adherence scores, Revenue scores, bankruptcy scores, collection scores, attrition scores, telecom scores, utility scores, capacity scores, fraud scores, response scores are all examples of so called secret consumer scores. They are commonly used by service providers and marketers as a way to predict our actions and measure our risk of doing something or, better yet, not doing something.
There’s really no way to control these consumer scores because in many cases they are set in opposition. For example, what makes for a good insurance score makes for a poor credit score & what makes for a good credit score can make for a poor response score. What makes for a good revenue score can make for a poor bankruptcy score. So, there’s no point trying to game the system because that’s impossible.
There are hundreds of other custom developed risk models that nobody has ever heard of that are commonly used by lenders, insurance companies and pretty much everyone else. A lot of the data fed into these models is either public (by definition) or is made public by us disclosing it (like on social media). So, to some extent we’re to blame for being such an open book. And, in many cases the data is unregulated which means the consumer has no rights to see or dispute the information and the data owner has no obligation to correct it.