The dark side of open banking

2 Likes

For renting? That’s insane and massive overreach. I’d tell them to get stuffed.

12 Likes

They can always go through another letting agent / landlord. It is what it is, there’s a choice either share it or don’t.

Not every landlord / letting agent does this yet, besides most ask for bank statements anyway, this is just the modern day version.

1 Like

Ouch. I’m sure many people have not choice but to play along with this, who knows what happens when you want to get a mortgage…

Now is the time to get 2 bank accounts - have your salary and standard bills (rent, utilities, council tax, stuff everyone has to pay) go through your will-share account. Then transfer a the rest to you other account and spend it however the hell you like.

I think its fair for them to see that you get paid and how much, and that you pay your bills on time - which is what I imagine they officially look for. But the things they could do with open banking are terrifying - don’t like how much you spend at the pub? Congratulations, you’re homeless. Doesn’t matter if it was a deposit for a your wedding reception, we’ll just assume you’re an alcoholic.

8 Likes

That is grim af.

And I’m sure that more will start asking once they cotton onto the possibility.

3 Likes

Holy shit, that’s absolutely horrendous.

I’d be interested to see what T&Cs clauses trigger if you then revoked the access after you’ve moved in.

Is there any capacity to filter what can be exposed via open banking to shady requests like this? @tjvr

@kieranmch I know you’ve left Monzo, but as open banking was your wheelhouse, I’d love to know your thoughts on things like this as well.

2 Likes

Probably so he knows how much you have so he can put your rent up next year :joy:

3 Likes

Mortgages applications will be doing it too me thinks, unfortunately it’s trivial and probably more common than you think for people to forge paperwork, ruining it for the rest.

2 Likes

When I moved out of university, I actually had to do this for some flats. I got denied for having bad “finances”. That’s because I had never had a job and I was moving for my job at Monzo.

Obviously as a student my finances were rather dire (what student’s wasn’t?) and they didn’t like that, despite the fact I was a student and moving into a job where I’ll actually get paid money.

Some landlords asked for 12-months up front. Like me, a student, could actually do that :frowning:

This just discriminates against people. I eventually found a landlord that didn’t do this

14 Likes

If there isn’t a review website for landlords / letting agencies, there really should be. This kind of nonsense is something you’d want to know about before you engage with them.

I think the problem is that demand exceeds supply, at the moment anyway.

So you can tell them you won’t give them your bank statement, 12 months up front or your inside leg measurement and instead of caving and being normal humans, they just wait for the next person that will do that.

6 Likes

Just to (slightly) play devil’s advocate here, Fronted (by @simon ex-Monzo) does a similar thing using open banking to be able to offer rental deposits. This is more or less a Good Thing as it’s helping folk to find places to live and to build up credit scores.

But the tech is the same. Should one be allowed and one not? How do we deal with this sort of thing?

3 Likes

I hate this. It’s becoming more and more difficult for people to rent - a basic need - because of these stupid kind of rules.

I have proof I have always paid my rent on time. I have proof of my income. I should not have to prove I have 50x the rent annually to rent a basic one bedroom flat.

It actually angers me. I don’t feel landlords have any right to be in your bank account like that.

Yes yes, I know you can just go to someone else. That just drives people lower and lower to landlords who are possibly more dodgy. The ‘market’ doesn’t always work out.

12 Likes

This can be achieved by providing payslips and a credit reference search, which wouldn’t show transaction data.

For me, this “we request this because it’s possible technically” is horrific. There is simply no need for gathering much of this data.

Open banking has a dark side. I can envisage life insurance companies begin to price policies according to healthy living assumptions (ie. If KFC appears regularly on your transaction list, for example – Flux users, you’re already populating this voluntarily). The concept is similar to the watchful box in your car which monitors your driving quality.

9 Likes

I don’t agree necessarily. Firstly I honestly dislike that a few (mostly US) private companies have my data that can affect something as fundamental as getting a roof over my head.

Secondly they can provide incorrect data, that sometimes isn’t known until it’s too late. I had an issue last year whereby a student loan I took out was showing as a credit card under Experian; it was constantly thinking I was at 100% maxed on the card. When I checked, it wasn’t listed as a credit card but as a loan (correct) but the balance was showing in my credit card utilisation, showing I was like 250% over my actually credit card limits.

Sure it got sorted and they paid me £100 for the inconvenience but it might have been pretty devastating if I’m trying to find a home.

I do not see how landlord references as to amounts paid on time, along with a payslip, should not suffice.

5 Likes

This is already in progress to a degree with other data sources, I can see how it could easily slip into Open banking too. With Vitality health/life insurance you can get money off/rewards by completing a certain amount of workout time tracked by an Apple Watch.

I don’t actually think it’s a bad idea on the face of it but there is something a little sinister about it too…

4 Likes

Salary in, and committed spending out, the bank account. Everything else on the ol’ credit card.

2 Likes

I remember reading an article that estimated around 60% of credit reports had mistakes.

Some of those may be trivial, but that percentage is far too high when this data is relied upon in so many important situations.

1 Like

I completely agree its unjustified mass data scraping. Who knows what sort of junk mail/calls you’d start getting once they’ve sold your details on…

I’m just suggesting that if you’re not in a position to tell a potential landlord to shove it, then giving them access to the bare-minimum of banking data that satisfies their (unreasonable) demand without leaking too much personal data might be something people can do.

As others have pointed out, this is grossly unfair to people who are honest and struggling. When my kids are old enough to want to rent their own place, I’ll have no problem putting an extra £500 or so in their account for 3 months so before so that they pass the ‘test’. (Assuming I can trust them to pay it back!). Similarly anyone with fraudulent intentions can also make an account look good for 3 months, get the keys then stop paying rent.

(Aside - isn’t 12 months upfront massively illegal for a short-term residential let? Or has all that changed?)

2 Likes

I saw an advert for this a while ago, they also give you a certain percentage off “healthy” food at Waitrose, but not unhealthy food.

Those kinds of nudges are partly a good thing and partly part of a worrying trend, I agree.

3 Likes