As Apple branches out into new industries different challenges are rearing its head. The Apple Card launch was met with much fanfare and the take-up seems to be pretty good thus far. Apple Card is meant to make your budgeting and spending as simple as possible and Apple want it to drive Apple Pay engagement over the long term.
Now, however, the product is being investigated due to claims of credit limits being set unfairly towards women. It’s important to note that it isn’t actually Apple being investigated, but rather Goldman Sachs who are the underwriters of the credit. What makes this a peculiar case – and anyone working in the industry would agree – is that generally women are better payers of credit products given that income and other debt, among other things, are the same.
A major instigator of this investigation are claims by Basecamp founder David Heinemeier Hannson, stating that he received twenty times the credit limit that his wife did, despite her credit score being higher than his. She also didn’t receive any customer service help other than lodging a “formal internal complaint.”
The @AppleCard is such a fucking sexist program. My wife and I filed joint tax returns, live in a community-property state, and have been married for a long time. Yet Apple’s black box algorithm thinks I deserve 20x the credit limit she does. No appeals work.
She eventually got a “VIP bump” to match his credit limit, but that appeared to have been a reaction to the public outcry. Hansson didn’t believe Apple or Goldman set out to be discriminatory, but that the outcome was sexist nonetheless.
This investigation has been launched in New York specifically, where any algorithmic bias violates New York law, and will try to assure customers that everyone is being treated equally. Goldman said in a statement that their decisions were based solely on “creditworthiness” and not other qualities like gender or ethnicity. This practice is obviously adopted widely in the finance industry.
There also remains the chance that there was simply an error in the credit assessment, which can happen from time to time due to edge cases or errors in the system. Nevertheless, this is surely not the PR that Apple Card wanted at this point in time.