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Home /Background /Increasing Price Discrimination /Subprime and Other Financial Services Exploitation

Big Data Platforms’ Helped Facilitate the Subprime Mortgage Debacle and Its Aftermath

Big data lay at the heart of the subprime mortgage and overall financial meltdown the nation suffered at the end of the last decade. Data crunchers were key to manipulating financial markets and securities throughout the financial industry and big data platforms were critical parts of the marketing machine that pushed subprime financial products out to the most vulnerable members of the American public.

In fact, by the mid-2000s, the lion’s share of the online advertising economy was being driven by subprime and related mortgage lenders.  As Jeff Chester of the Center for Digital Democracy said back in 2007 "Many online companies depend for a disproportionate amount of their income on financial services advertising, with subprime in some cases accounting for a large part of it."[i] As the subprime frenzy was hitting its height that year, a July 2007 Nielsen/Netratings survey of online display advertisers showed that the top five of those advertisers were all involved in the mortgage lending industry to some extent, delivering almost $200 million in monthly revenue to online advertising companies like Google, MSN, and Yahoo! [ii] These delivered hundreds of billions of views of online ads that helped drive the frenzy of refinancing and subprime mortgages with ads like the ubiquitous “LowerMyBills” and other online enticements.  These numbers are only for display ads online; search advertisers don’t share data on specific revenue from particular companies, but reports at the time showed that mortgage loan companies were paying top dollar for keywords like “mortgage” and “refinance” with prices going for as much as $20 to $30 each time a user clicked on a search ad.[iii]

  • Read more about Big Data Platforms’ Helped Facilitate the Subprime Mortgage Debacle and Its Aftermath

News Clips

  • Teddy Nykiel . Banks Mine Big Data to Get to Know You Better, and Better, NerdWallet, 03/06/2015.
  • Jay Greene. Feds shut down high-tech mortgage scammers, CBSNews.com, 11/16/2011.
  • Karen Blumenthal. How Banks, Marketers Aid Scams, Wall Street Journal, 07/15/2009.
  • Jeff Chester. Role of Interactive Advertising & the Subprime Scandal: Another wake-up call for FTC, Digital Destiny, 08/28/2007.
  • Faisal Laljee. Subprime Mortgage Bust Could Create Ad Trouble for Google, Seeking Alpha, 02/20/2007.

Related Opinion

  • Is Apple the digital "Trojan Horse" that enables greater data collection? Its use of "behavioral targeting", CDD Digital Destiny, 09/19/2014.
  • Seeta Peña Gangadharan. The Dangers of High-Tech Profiling, Using Big Data, New York Times, 08/07/2014.
  • Nathan Newman. Taking on Google's Monopoly Means Regulating Its Control of User Data, Huffington Post, 09/24/2013.
  • Robert X. Cringely. Google’s Pound of Flesh, I, Cringely on Technology, 09/27/2010.
  • Faisal Laljee. Subprime Mortgage Bust Could Create Ad Trouble for Google, Seeking Alpha, 02/22/2007.

Related Policy Reports

  • Alex Rosenblat, Rob Randhava, Danah Boyd, Seeta Peña Gangadharan, and Corrine Yu. Data & Civil Rights: Consumer Finance Primer, Data & Society/OTI/Leadership Conference, 10/30/2014.
  • Comment: Regarding the Use of Mobile Financial Services by Consumers and Its Potential for Improving the Financial Lives of Economically Vulnerable Consumers, U.S. PIRG and Center for Digital Democracy, 09/10/2014.
  • Civil Rights Principles for the Era of Big Data, Multiple organizations, 02/27/2014.
  • Liars and Loans: How Deceptive Advertisers Use Google, Consumer Watchdog’s Inside Google Report, 02/21/2011.
  • A Review of the Data Broker Industry: Collection, Use, and Sale of Consumer Data for Marketing Purposes, U.S. Senate Committee on Commerce, Science and Transportation, 12/18/2003.

Related Academic Analysis

  • Nathan Newman. The Costs of Lost Privacy: Consumer Harm and Rising Economic Inequality in the Age of Google, William Mitchell Law Review, 03/01/2014.
  • Ed Mierzwinski & Jeff Chester. Selling Consumers Not Lists: The New World of Digital Decision-Making and the Role of the Fair Credit Reporting Act, Suffolk Law Review, 12/01/2013.

Media Reports

  • Banks Mine Big Data to Get to Know You Better, and Better
  • Feds shut down high-tech mortgage scammers
  • Role of Interactive Advertising & the Subprime Scandal: Another wake-up call for FTC
  • How Banks, Marketers Aid Scams
  • Subprime Mortgage Bust Could Create Ad Trouble for Google

Opinion

  • Is Apple the digital "Trojan Horse" that enables greater data collection? Its use of "behavioral targeting"
  • The Dangers of High-Tech Profiling, Using Big Data
  • Taking on Google's Monopoly Means Regulating Its Control of User Data
  • Google’s Pound of Flesh
  • Subprime Mortgage Bust Could Create Ad Trouble for Google

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