Goldman faces probe after entrepreneur slams Apple Card algorithm in tweets
BENGALURU (Reuters) – A probe into Goldman Sachs Group Inc’s credit card practices has been initiated after tweets from a tech entrepreneur alleged gender discrimination in the new Apple Inc card algorithms that are used to determine credit limits. In a series of Twitter posts starting on Thursday, David Heinemeier Hansson railed against the Apple Card for giving him 20 times the credit limit that his wife got, Bloomberg reported.
Hansson, who is the creator of web-application framework Ruby on Rails, didn’t disclose any specific income-related information for himself or his wife but said they filed joint tax returns and that his wife had a better credit score, the report said. New York’s Department of Financial Services confirmed that an investigation was being conducted. Andrew Williams, a Goldman Sachs spokesman, declined to comment on whether Hansson had contacted Goldman regarding the concerns raised on Twitter because the bank does not discuss matters involving individual customers publicly.
The Apple Card, launched in August, is Goldman’s first credit card. The Wall Street investment bank has been offering more products to consumers, including personal loans and savings accounts through its Marcus online bank.
The Department of Financial Services “will be conducting an investigation to determine whether New York law was violated and ensure all consumers are treated equally regardless of sex,” a department spokeswoman told Reuters in a statement.
“Any algorithm that intentionally or not results in discriminatory treatment of women or any other protected class violates New York law.”
The iPhone maker says the card would be synched with iPhone users’ Apple Wallet and could be used to buy Apple products at a discount.
Earlier, Apple Inc and Goldman Sachs Group Inc rolled out a virtual credit card, which will help the iPhone maker diversify from device sales and also build out the Wall Street bank’s new consumer business.
With the card, Apple aims to draw in iPhone owners with 2% cash back on purchases with the Apple Pay service, no fees and an app to manage related finances.
For Goldman, the card will enhance the bank’s focus on its Marcus consumer banking brand, which it started in 2015 to even out volatile results from businesses such as trading and investment banking.