Buy Amway Products, Get Drink, Play Pool. And They Take Away Your Credit Cards.

Wired, reports that a credit card company has come under fire and FTC investigation for “behavioral scoring”: reducing credit limits for people who use a variety of services. These services included, “Direct marketing merchants [like, one assumes, Amway and Nutrilife], marriage counselors, personal counselors, automobile tire retreading and repair shops, bars and night clubs, pool and billiard establishments, pawn shops, and massage parlors.”

I’d doubt that there’s any firm social science that shows that pool players are bad credit risks but it’s pretty certain that getting divorced, going out drinking every night, buying a boatload of Amway products, pawning your possessions and the like all correlate with financial distress. (“Massages,” furthermore, would correlate with financial distress when they are, ummmm, something else and therefore lead to marriage counselor visits.)

I personally wouldn’t have any problem if my credit card company did things like this. And even the FTC itself doesn’t contend that the company violated the law; just that it didn’t disclose its practices. In fact, I would see this kind of scoring as a net-benefit to consumers: the more companies can distinguish between “good” and “bad” consumers, the better they can treat “good” consumers and the more they can focus on turning “bad” consumers into good ones.