HUD’s complaint against Facebook raises questions about target reverse mortgage advertising
As lenders and originators find themselves more challenged to reach the ideal prospective reverse mortgage borrower, some have turned to online and social media advertising to boost their marketing efforts. The question is when does targeted demographic marketing become discriminatory?
Earlier this month the Department of Housing and Urban Development filed a formal complaint against the social media giant Facebook, accusing them of allowing companies to exclude certain groups from viewing their advertisements. In its official press release, HUD claims Facebook advertisers can control housing ads based on race, color, religion, sex, familial status, national origin, disability, and zip code. Legal arguments are expected to focus on potential violations of the Fair Housing Act. Facebook responded in a statement insisting that “there is no place for discrimination on Facebook: it’s strictly prohibited in our policies”. The timing of Facebook’s statement concerning discrimination is somewhat ironic considering the recent widely-publicized claims of discrimination or censorship against some popular commentators; blocking or removing them from the platform.
Those who have advertised products or services on Facebook are familiar with the plethora of ad filters to target the ideal consumer. Even those who utilize direct mail filter their mail lists by age, loan to value ratios, and even specific zip codes with higher-valued properties that are more likely to lead to a qualified borrower. HUD claims Facebook promotes itself as the ideal platform for housing-related promotions. Strange considering the tech giant could have easily eliminated noncompliant filters specifically for ads related to housing or mortgage financing. Without such restrictions in place, a ProPublica investigation showed it was able to buy dozens of home rental ads that specifically excluded African Americans, mothers of high schoolers, those interested in wheelchair ramps, or Jews.
While instances of discriminatory ads related to housing may appear obvious, the waters become murkier for reverse mortgage advertisers…
1 Comment
Although we all understand efficiency in marketing, discrimination is a matter of legal definition, not lowest cost strategy. Anti-discrimination has tremendous compliance costs associated with it and in some cases has resulted in the over aggressive creating discrimination in their desire to exceed minimum standards.
HUD should monitor Facebook and other media for discrimination in delivering marketing materials.