News  |    |  June 10, 2019

What a report from Germany teaches us about investigating algorithms

News article by Nicholas Diakopoulos.
Published in Columbia Journalism Review.


Reporting about large scale finance decisions is difficult for any journalist—but a team of German investigative reporters has crowdsourced a major investigative story revealing flaws in a closely guarded credit scoring algorithm.

Most citizens in Germany have a Schufa score, which is something like the FICO score in the US. Various bits of consumer data are put through a proprietary algorithm and out comes a risk assessment score indicating credit worthiness. The scores are used to inform financial decisions in all kinds of contexts: from banking and insurance to real estate rentals and other service contracts. But you don’t have to look very hard to find cracks in the accuracy of the scores. Anecdotal reports of discrepant scores, as well as a general lack of transparency and explanation around how the proprietary system operates, raise questions. [ . . . ]