Item — HN Reader

If the practice is clearly outlined in the terms and conditions which the user accepts before using the app (so, not secretly downloading contacts as in your example), I would not oppose it, nor call it unethical. The legality would depend on the country's laws.

Why would this be considered unethical, while not paying back would not be considered theft? If I were to lend someone some money, the deadline should be agreed upon and I would adjust it at the request of the borrower once or twice. I would also tolerate a delay of a few months, or a maybe a year, depending on the situation. But I would be pretty pissed off if they defaulted after that.

The idea that they pay back in social credit seems like a good solution to prevent this from happening again with others.

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Lending is a business. Lenders defaulting on their loans is just business as usual. It's about as surprising as hearing that water is wet. You have to charge those who pay their loans back more if you want to break even. Shame doesn't compensate for the lost money. It's more of a revenge thing e.g. you borrow money from the mafia and they beat you up.

Riskier lenders are more likely to default so they get a higher interest rate to compensate for the risk. A lot of these people shouldn't be allowed to get a loan they can't pay back in the first place. If you are using an alternative form of collateral such as "social credit" then you are doing so with the intention of making it easier for people to get a loan even when it is certain they can't pay it back with money alone.

The shaming is no longer a result of personal failure. The shaming is now the cause of failure.

Think about it this way. The maximum amount of money you can pay back over 3 years is $3000 but you also have a reputation that is worth paying $500 for to preserve it. So the maximum you can borrow is $3500. The bank will accept the loan but you can't actually get the required amount. From a business perspective the bank is paying your debt in exchange for a very odd form of labor. It's just one step removed from indentured servitude.

No, it's more about making them care more about paying you back. I don't agree with the practice, but lets not pretend that it's strictly about revenge rather than motivating the person to pay the debt.

“Lenders must be made whole, and can take any step necessary to be made whole” is an extremely common and extremely weird point of view.

If one believes in the free market, shouldn’t one also believe that bad lenders who give out risky loans should face the risk of not getting repaid?

In the United States we have laws against third-party disclosure of debt.

I’ve loaned many friends large amounts of money over the years, and never once has anyone repaid me, and that’s ok. When I make a loan it’s with no expectation of repayment.

I honestly don’t understand people who think it’s fair or right to ruin someone’s life just because you have power over them. It’s also possible to be kind, and generous, and those usually repay greater dividends than any interest rate.

No, I would not ruin someone's life over a loan, that's why I said "depending on the situation".

I've also given away lage amounts of money - not as loans - over the years without the expectation of being repaid, so it's not a question of generosity.

Simply put, it is not OK to promise someone to payback within X time and not do it. If you are not sure you would be able to pay back, make it clear upfront. If something out of your control happens, it's OK. I agree with you that in that case we should be nice to each other and help each other.

Also I'm not considering interest rates here, just paying back the loan as is.

I guess it’s down to moral absolutionism and universality - and while you may not be the shark your initial post suggested, I’m afraid to say many are.

I would always expect myself to repay a loan, on or ahead of time.

I don’t expect the same of others, however - I think most people, when taking a loan, expect and intend to pay it back - but life is not predictable, and their circumstances change.

The thing is, being chased over a small amount of money is enough to ruin someone’s life, at least in the here and now - I’ve seen people in desperate situations due to debt, and I don’t mean penury, I mean guilt, remorse, feelings of failure.

So, for me, it’s just not worth it. If someone pays me back, which has happened, then I’m happy, but I’ll never pursue a debt. They know they owe me. That’s enough. Don’t need to go piling the guilt on.

In terms of how this is transferrable to reality, it’d be interesting to see how incentives rather than disincentives might work in a lending situation.

I really respect your attitude.

I haven't been in a desperate need for a loan, nor seen people feeling the guilt of failing to pay back, so it's hard for me to relate. It's helpful to learn about it.

> it’d be interesting to see how incentives rather than disincentives might work in a lending situation

What kind of incentives might work here? I thought about a public trust score (some kind of "karma") that is attributed to people if they pay back succussfully. Not sure how well it would work in practice.

The whole karma thing is an odd one. I look at something like the social credit systems in China with some trepidation, as the power in the instrument is immense - but at the same time think the concept as a whole potentially has legs. Why not reward people for good behaviour? Be monetarily poor but of good reputation, xyz is open to you. Be rich and of poor reputation, then those same possibilities are closed.

I suppose the problem arises when you start trying to arbitrate good and bad, and who gets to be that arbiter. If you boil it away to purely a system for rewarding actions around financial credit, then you have... credit scores.

> Why would this be considered unethical, while not paying back would not be considered theft?

So you get that not paying it back is not theft, yet you think the behavior outlined in the article is ethical?

There's so many layers of unethicality it's insane.

The idea that these people's privacy is being invaded to such a degree their entire social graph is stored on these servers, the fact these people understand what they're doing is bad insofar as to say they stopped but continue anyways, the kinds of terms these loans provide with such flimsy "collateral", the use of intimidation to resolve a debt?, the psychological effects of treating people like these companies are?

> The idea that they pay back in social credit seems like a good solution to prevent this from happening again with others.

Did you read the article?

(Ignoring the ridiculous of acting like it's some altruistic endeavor to try and "save others" from getting taking advantage of...)

It doesn't even prevent it from happening to them let alone someone else!

They go through these people's contacts, start harassing them and their acquaintances, and the people still end up not paying, and in fact they end up inviting people who actively plan to game their "collateral" with false info.

> So you get that not paying it back is not theft

Not paying back when you have the capacity to do so is theft.

I don't agree with the harassment this company is doing, that's unethical. I just agree with the general idea that social pressure can be an effective measure to make loans working. How to implement that in practice should take in consideration a lot of exceptions and corner cases.

No it isn’t. It’s just doing business see https://www.nolo.com/legal-encyclopedia/whats-the-difference... you can walk away from a mortgage and lenders are not allowed to go after personal assets.

> Not paying back when you have the capacity to do so is theft.

No, it's breach of contract, not theft. The lenders gave the money voluntarily (expecting more money in return), it wasn't taken from them. It's obviously not theft.