Nov 15, 2019
Does the Apple Card Have a Gender Problem?
Regulators are investigating whether a credit algorithm favors men.
Apple may be known primarily for its cutting edge laptops, watches and other consumer tech gear, but it has found itself with allegations of a stubborn, old problem.
It has recently faced consumer criticism for potential gender discrimination in the way it grants credit for its Apple Card, a new credit card it launched in partnership with New York investment bank Goldman Sachs in August, 2019.
Customers have reportedly complained that men may receive credit limits up to 20 times larger than women, often when they live in the same household with shared financial lives.
While Apple has yet to comment, Goldman Sachs said it is looking into the complaint, according to CBS News. Goldman says that gender is not a factor in issuing credit limits and that it is possible for two family members to have different limits.
- David Heinemeier Hansson, the creator of a web development platform called Ruby on Rails, first drew attention to the potential issue when tweeted on November 7, 2019, allegations that Apple approved him for a credit limit that was 20 times higher than that of his wife. Hansson said on Twitter that he and his wife file “joint tax returns, live in a community-property state, and have been married for a long time.” Additionally, Hansson reportedly said his wife has a higher credit score than he does.
- Hansonn’s tweet went viral, and attracted the attention of Apple co-founder Steve Wozniak, who seconded the accusation a few days later. He tweeted: “I’m a current Apple employee and founder of the company and the same thing happened to us (10x) despite not having any separate assets or accounts.”
- These allegations attracted the attention of the New York State Department of Financial Services, which is reportedly investigating Apple’s algorithm and the practices of Goldman Sachs, Apple’s credit card provider.
- Following the viral thread, Apple reportedly increased Hansson’s wife’s limit.
Discrimination, tech, and banking
Gender discrimination, or the unfair treatment of someone on the basis of sex, is illegal. It is also considered a problem across industries, and can include harassing work environments, and barriers to promotions, even discrimination against pregnancy. Additionally, women tend to be paid less as the result of something called the pay gap. Women are paid 80.7 cents for every dollar men are paid in the U.S., according to reports.
This issue has drawn particular attention in the male-dominated tech industry, where 60% of female employees are offered lower salaries than their male counterparts, according to one survey from Hired.
Recently, tech companies have received further criticism for evidence of discriminatory behavior in algorithms, which are assumed to be objective. Other companies have faced similar claims of discriminatory algorithms. In October, 2019, the same department investigating Apple opened a probe into UnitedHealthGroup Inc., for using an algorithm that allegedly discriminated against black patients.
Banks have also historically faced criticism for discriminatory practices in lending against potential mortgage customers on the basis of race or ethnicity, in a practice called redlining. As well as general discrimination in lending which federal fair lending regulations were put in place to protect against.
More about Apple and Apple Card
Apple launched its credit card, seeking new avenues for profit in services, following a slowdown in iPhone sales.
For the end of September, Apple and Goldman have extended $10 billion worth of credit to consumers for the Apple Card.
The Apple card charges no annual fees, and no overdraft or late fees. People can apply directly on their iPhones, and once approved, the card is loaded directly into the wallet function of their phones. In typical Apple fashion, the card changes color within the Apple wallet according to how the user spends.