The dark side of open banking

This was my point six days ago. Yes, Credit Ref Agencies are evil data–sucking black holes, but they do the core job of saying “Jamie pays all his bills on time, and Lloyds, Admiral and EE are all reporting good relationships”.

That said, the explanation by the landlord above was clear and sound.

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They also report bad relationships for 6 years. That’s not okay when we’re talking about a home to live in.

Lots of people might have bad credit history with EE and others, but never missed a rent payment.

Given many on here can’t even get a basic overdraft with Monzo I wouldn’t like to think that it could be used to determine if they can afford rent or not.

Up until about 2 years ago I had a default on my file - from a tiny amount as a student but nonetheless there - 5 years after that I was on a good salary in a stable job. A credit check might have had me with a low score but that doesn’t mean I can’t afford rent.

Sorry I have to steadfast disagree with a credit check being used to provide a basic human right such as shelter.

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Yeah, you’re right.

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I actually think this is less intrusive than landlords who ask for bank statements…

The open banking option goes to an FCA regulated third party who then score your risk/check for basic things like income/outgoings etc.

The full transaction information isn’t shared with the landlord who you may then have to have a nice relationship with. So they don’t know about your onlyfriends subscription etc.

With bank statements that many ask for they get all this information.

It would be great if none of this was needed…but I’d prefer this to giving a random landlord my personal bank history for 3months.

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It very much depends, you really don’t know and can’t know. At least with bank statements you are sure of what you are sharing and can redact things if needed.

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I do know? I’m a landlord and have had tenants use this option of open banking sharing (it’s not required).

I don’t see their p*rn subscriptions or ASOS addiction where I would if they brought me paper bank statements (which I never asked for tbh but lots do)

I do know? I’m a landlord and have had tenants use this option of open banking sharing (it’s not required).

The problem is that as a prospective tenant you do not know and can’t be sure with what happens with your data once it leaves your bank. The particular referencing company you’re using may not give you (the landlord) access, but another one may do, or maybe some other landlords have some special deals with this company that do give them access, etc.

The referencing company’s algorithm may also be wrong or break due to a bug and wrongly reject a tenant (without you or the tenant even knowing which transaction is to blame and thus not being given the option to explain it), especially if you take into account the terrible data quality you get out of legacy banks’ open banking feeds.

There’s also no guarantee as to what happens with the data once your and the tenant’s involvement is done with it. That data may very well be used for other purposes (which benefits neither you nor the tenant). The ICO has clearly set the example that it’s OK to be misusing personal data and the worst that will happen if things come to light (which are a big if given how hard is it to actually report anything to them) is a slap on the wrist, and the FCA will not get involved unless large-scale monetary losses happen.

In contrast, good old bank statements will sit in physical format or digitally in someone’s email, which I’ll trust way more regarding misuse than having it all in a nicely normalized DB with hungry data scientists looking forwards to their next promotion.

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I always assumed landlord and the like could only see public information available such as CCJs, and not an actual credit report.

Normally yes that would be the case. What we’re talking about here is an open-banking-based system that would give the referencing company full access to your bank account. While not all of them expose the raw data to the landlord, it’s ultimately not something you have any guarantees on. At least with bank statements you know exactly what you’re giving them and can redact things if needed.

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I’d imagine the main driver for rejection could be bounced or failed payments

You don’t always see those actually, at least not on legacy bank feeds. You may get them with proprietary APIs such as Monzo or Starling but from my experience working with TrueLayer data I don’t recall any provisions in their API to represent declined payments. You may only be able to infer them based on declined payment fee transactions if the bank charges them.

I’m just not sure what the issue though? That’s an option too. The prospective tenant chooses which they prefer.

And I’ve used 2 different reference agencies that both allow open banking and neither gave me the details so it doesn’t seem like a “thing” to be too worried about.

Just feels a bit like reading an article from The Sun where it’s all “the worst thing in the world”/doomsday when in reality (at present) it’s less invasive and easier for everyone

Even the title of this thread reads like something from the daily mail

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Normalizing this kind of thing means that eventually anyone who doesn’t want to use the open banking flow will be considered to have things to hide and automatically disqualified. It’s a slippery slope.

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This is a very useful tip in general to put out there!

You feel free to redact anything you want from your bank statements when you require them for proof of identity and such. Aside from the obvious information that the party you’re handing the document over to needs to see.

As a general rule, I redact everything that isn’t relevant, which is simply adding big black boxes to cover stuff in markup before sending or printing.

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*for the landlord.

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Yeh if the reference agency allows you to that seems like a win for privacy! With a bit of extra effort for the tenant

It’s no different for the landlord really? Other than a bit faster. Which is also good for the tenant usually.

Costs the same…same referencing agency does it.

Gives options to tenant. Open banking in 5mins. Landlord sees nothing except a yay or nay.

Or download bank statements and payslips and anything else needed. Sometimes post/scan it sometimes upload. Then wait a week for manual review by the agency. And the landlord can get a view/copy as well.

That’s just my experience having rented for years and now being a landlord