Argyle CEO Shmulik Fishman said the company can advise lenders on factors such as consistency of work and upward trajectory. “Does your job title move up every six months? These are signs of a good worker and one you might want to take another look at,” he says.

Reputation markers, however, may reflect bias. Shannon Liss-Riordan, a lawyer who is suing Uber over its allegedly racist customer star rating system, recently interviewed the drivers she represents. Of more than 4,000 respondents, 17.4% of white drivers said they were turned off due to a poor rating, compared to 24.6% of Asian drivers, 24.1% of black drivers and 24.9% of those who marked their race as “Other”. Only 16.9% of Latinx drivers said yes, but the actual number is likely higher because several drivers identified themselves as races such as Hispanic under “Other”. “I find it shocking that customer service data is used for other purposes that could affect drivers’ livelihoods, including access to loans or other benefits,” Liss-Riordan said. “This is a very dangerous precedent.”

Asked about the risk of perpetuating prejudice, Fishman said: “We are not in the business of discrimination. And neither are we, very important, in the business of creating criteria for the choices of approval or rejection.

Granted, not all payroll data companies focus so heavily on reputation data. “We don’t do that,” says Kirill Klokov, CEO of Truv. “I just don’t find it helpful, when applying for a loan, to know your star rating on Uber. The primary use case is that you should be able to prove that in the absence of a FICO score [for an immigrant] like me, I’m actually a person who will repay the loan to you. Or I actually worked at a company I claim to have worked for.

While consumers must consent to sharing their data, if they later change their minds, they may lose access to a product and still have their data passed on. And some workers struggling financially may feel like they have little choice. Michael Gray, a pest control specialist from Iowa, regularly uses a cash advance app called Earnin for advances of up to $550. He agreed to have his GPS location monitored by Earnin to confirm he had gone to work. (Earnin doesn’t use payroll data.) Though he found it intrusive, he complied. “They kind of had you by the balls when they’re dealing with your money and trying to get by.”

Despite borrowers’ difficult relationship with payday advance products, the convenience can be hard to resist. “If I need $100 for a bill or my groceries or whatever, it’s right there,” Gray says. “It’s fast. It’s a few clicks. So it was quite effective in keeping me in their ecosystem. He adds, ‘I really want to get out.’

What consumer and labor advocates all seem to agree on is that the proliferation of these financial products is a symptom of a deeper problem: insufficient compensation. Access to employer-sponsored earned wages “essentially allows you to pay your workers as little as possible because you may be supporting poor employment practices,” says David Seligman, executive director of Towards Justice, a law firm non-profit that represents workers.

“What we need most are higher wages, better tax programs, more support for low-income families and a child tax credit,” Levy says. “But other than that, the reality is that we have a lot of people living paycheck to paycheck. They will sometimes need credit to make ends meet.

Updated 03/23/22, 6:45 PM EDT: An earlier version of this story stated that buy-it-now, pay-later, and payday-advance products were not governed by lending laws. Regulators consider whether or not they are subject to these laws.

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