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Assessing credit rating on the basis of statistical data alone is discrimination – credit institutions must revise their practices

The National Non-Discrimination and Equality Tribunal has determined that a person was discriminated against in the granting of consumer credit because no individual assessment of the person's solvency was carried out. The creditor only assessed the solvency on the basis of background information, such as age, gender, place of residence and native language. The Non-Discrimination Ombudsman had submitted the case to the National Non-Discrimination and Equality Tribunal for consideration. The Non-Discrimination Ombudsman considers the decision of the tribunal important and expects creditors to change their practices.

The National Non-Discrimination and Equality Tribunal stated that the creditor's conduct is multiple discrimination. The amount of the conditional fine (EUR 100,000) also reflects the seriousness of the discrimination.

According to the Non-Discrimination Ombudsman, this is the first legal decision concerning discrimination in automated credit granting but the procedure itself is not exceptional.

The case shows that anybody can be discriminated against. In this case, discrimination was on the grounds of native language (Finnish), gender (male), young age and living in a sparsely populated area, says Non-Discrimination Ombudsman Kirsi Pimiä, summing up the case.

Ways to prevent the Finnish society from becoming more unequal are continuously sought. Equal treatment prevents the widening of social gaps and it requires that discriminatory practices are identified and changed, Pimiä continues.

As far as we know, similar scoring without an individual assessment of solvency is also used by other creditors when granting credit. We expect creditors to consider the decision in their activities and take a critical view of their own procedures, Kirsi Pimiä adds.

The credit institution in question justified its procedures by referring to economic reasons. Statistical mathematics and artificial intelligence often provide a workable, quick and inexpensive solution but they should not be used in a discriminatory manner, explains Pimiä.

The Non-Discrimination Ombudsman also plans to examine the procedures used by other institutions granting consumer credit and determine their lawfulness. The Non-Discrimination Ombudsman also intends to work more closely with the authorities supervising the operations of credit institutions.