Published: Mon, November 11, 2019
Markets | By Otis Pena

Federal regulator opens up investigation into Apple Card over gender discrimination accusation

Federal regulator opens up investigation into Apple Card over gender discrimination accusation

The latest allegations of algorithmic discrimination come from David Heinemeier Hansson, co-founder of Basecamp, who in a series of tweets has said that he received twenty-times the credit limit his wife received when applying for an Apple Card, despite there being no material differences in their credit worthiness.

According to Bloomberg, a Goldman Sachs spokesperson said that it's possible for two Apple Card family members to receive significantly different credit limits, but "in all cases, we have not and will not make decisions based on factors like gender". My wife and I filed joint tax returns, live in a community-property state, and have been married for a long time.

A spokesperson for the NYDFS said "the department will be conducting an investigation to determine whether NY law was violated and ensure all consumers are treated equally regardless of sex".

NY law prohibits discrimination against protected classes of individuals, which means an algorithm, as with any other method of determining creditworthiness, can not result in disparate treatment for individuals based on age, creed, race, color, sex, sexual orientation, national origin, or other protected characteristics.

Mr Hansson said Goldman's response does not explain what happened after he started airing his issues on social media.

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Hansson said the card offered him a credit limit 20 times greater than it gave to his wife, even though she has a higher credit score.

The card is not yet available in Ireland.

The agency is "troubled to learn of potential discriminatory treatment in regards to credit limit decisions reportedly made by an algorithm of Apple Card, issued by Goldman Sachs", said spokeswoman Sophia Kim. That's despite the fact that the couple shares various bank and credit card accounts and that other lenders more or less treat them the same for credit purposes.

Interestingly, this is the second investigation of this kind the NY regulator opened in recent weeks, following another into claims that a UnitedHealth Group Inc. algorithm was biased in favor of white patients over black patients.

The spokesman continued: "Any algorithm that intentionally or not results in discriminatory treatment of women or any other protected class of people violates NY law". "My belief isn't that there was some nefarious person wanting to discriminate". How do you know there isn't an issue with the machine-learning algo when no one can explain how this decision was made? Meanwhile, technology companies are moving in on the financial services industry's turf, with businesses such as Amazon, Apple, Facebook and Google offering loans and payment options. The card was rolled out earlier this year. "It's not a gender-discrimination intent but it is a gender-discrimination outcome".

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