I already dislike the requirement of submitting to a credit check for services that aren't lending (and thus don't have to comply with finance-related regulations), have a fixed cost and can be trivially cut-off in case of non-payment such as internet or telephone service. Sadly, this battle has already been lost and the practice has been normalized; most people don't bat an eye and in monopolized industries they don't have a choice anyway.
Open Banking making this even easier is not a good thing as it just means more and more companies will now be doing this, with the inevitable overreaching data collection that follows.
At least with a credit check, all the information they get is identity verification and a very high-level overview of any credit accounts you have open and whether they're in good standing.
With Open Banking, they get a full account history, including detailed timestamps and locations for card purchases (if the bank supports it - modern banks do, and it's just a matter of time before legacy banks catch up). That's a lot of personal data which can be misused for discrimination, price segmentation, etc with very little oversight.
This was one of the biggest shocks for me. Other places you can pay a deposit (approx one month bill) in advance and they’ll cut you off if you go over it. No credit check required.
Last time I moved between states, I asked and was able to pay a deposit to avoid the credit check. I randomly got it refunded several years later after I'd forgotten about it.
Of course that was over a decade ago. And if this data becomes another revenue stream, of course that won't be an option.
> services that aren't lending ... such as ... telephone service
I'm in Canada, not the UK, but the last time I had a post-paid plan with a cellular ISP (~2015), they actually structured it in the contract as some type of revolving credit instrument, where your "credit limit" is the maximum outstanding invoice amount you can have before they cut your service off. Like any credit card, this actually involves the cellular company — as underwriter of the loan — locking up some of their own assets for each customer account, commensurate to said credit limit. That small amount of extra revolving credit showed up on my credit report!
My understanding is that they do this because, much like a credit card, cellular accounts can actually generate non-predictable-to-the-underwriter charges. Long-distance (esp. 900) peerage fees, instantaneous charges from SMS short-codes, and purchases through SIM Toolkit "apps", can all bill a cellular account directly; with the latter two classes of fees not being settled after the fact, but rather settled immediately (so the relevant merchant can receive their cut), with the cellular ISP temporarily footing the bill for them until you pay.
In the UK I think for at least a decade. I think I can remember submitting to a credit check for a mobile phone contract in 2012, and certainly again when I changed provider in 2015
I already dislike the requirement of submitting to a credit check for services that aren't lending (and thus don't have to comply with finance-related regulations), have a fixed cost and can be trivially cut-off in case of non-payment such as internet or telephone service. Sadly, this battle has already been lost and the practice has been normalized; most people don't bat an eye and in monopolized industries they don't have a choice anyway.
Open Banking making this even easier is not a good thing as it just means more and more companies will now be doing this, with the inevitable overreaching data collection that follows.
At least with a credit check, all the information they get is identity verification and a very high-level overview of any credit accounts you have open and whether they're in good standing.
With Open Banking, they get a full account history, including detailed timestamps and locations for card purchases (if the bank supports it - modern banks do, and it's just a matter of time before legacy banks catch up). That's a lot of personal data which can be misused for discrimination, price segmentation, etc with very little oversight.