Yahoo Japan officially launches a credit scoring service on July 1.  A pilot program with 13 companies provided high-scoring users with special offers and matched preferred freelancers to companies, Yahoo said in a statement on June 3.

Some users of Yahoo Japan Corp. are objecting to Japan’s biggest web portal of rolling out its new credit rating system, which is being compared to China’s social-scoring initiative.

The 48 million people with a Yahoo! Japan ID will have to opt-out within a privacy settings webpage if they don’t want to be rated. The score is based on a variety of factors and is calculated based on inputs such as payment history, shopping reviews, whether a user canceled bookings and the amount of identifiable personal information. Unless users opt out, their ratings may be accessible to freelance jobs site Crowdworks Inc., Yahoo’s bike-sharing service and other businesses.

Yahoo’s new credit-score program follows efforts by Mizuho Financial Group Inc., NTT Docomo Inc. and other companies to use algorithms to assign ratings to consumers. Japan doesn’t have a system similar to FICO in the U.S., so businesses in the world’s third-largest economy have come up with their own solutions to determine financial trustworthiness. Yahoo’s program shares some elements with China’s Sesame Credit, a subsidiary of Alibaba Group Holding Ltd., according to Masahiko Shoji, a professor at Musashi University specializing in policy and governance issues.

Yahoo Japan, partly owned by SoftBank Group Corp., said users consented to the program when they first registered their IDs, eliminating the need for opt-ins. Yahoo said it uses the score within its services, but won’t share personal information without additional user consent.

“We are aware of the opinions on social media,” the company said in an emailed statement. “We regret causing any concerns, and will work to improve our communication around this issue.”

Source: Bloomberg