Type of SIM card as a predictor variable to detect payment fraud (AA:2022:01)

Summary advice

The audit commission advises against using type of SIM card as an input variable in algorithmic models that predict payment defaults and block afterpay services for specific customers. As it is likely that type of SIM card acts as a proxy-variable for sensitive demographic categories, the model would run an intolerable risk of disproportionally excluding vulnerable demographic groups from the payment service. Absent reliable data that demonstrates otherwise, the ethical risk of including the SIM card variable outweighs potential benefits. The commission advises to consider a variety of alternatives in dealing with payment defaults.

Source of case

Anonymized large multinational company with e-commerce platform.


Dowload the full report and problem statement here.

Normative advice commission

  • Fleur Jongepier, Assistant Professor Digital Ethics, Radboud University
  • Jan Overgoor, PhD Management Science and Engineering, Stanford University
  • Merel Noorman, Assistant Professor Law, Technology and Society, Tilburg University
  • Roel Dobbe, Assistant Professor Engineering Systems and Services, TU Delft

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