LOS ANGELES — Adult performers and sex workers have long grappled with the discriminatory practices of a wide range of consumer service providers, from landlords to lenders, from schools to social media sites and more — and now some of their fans are being caught in the crosshairs of prudish policymakers, too.
A report from Down Under is revealing that young people are facing pushback on their home loan applications due to the mislabeling of banking transactions as adult entertainment or other “sin services” such as drugs or gambling.
In some cases, this may be done as an intentional “joke” by the account holder; self-annotating a transaction such as a person-to-person payment for the share of a dinner expense as an illicit drug purchase; while at other times, it might be an innocent transaction that loan officers mistakenly perceive as vice-related due to its dollar amount, the time of the transaction or other factors that fit certain patterns.
Writing for Domain, Senior News Producer Elizabeth Redman explored lenders’ concerns over comments that appear in an applicant’s bank statements.
“Borrowers’ expenses have been in the spotlight as lenders hesitate to offer credit to someone who may struggle to pay it back,” Redman wrote. “Overuse of Uber and Uber Eats has been cited as a reason to knock back mortgage applicants, with banks also wary of other debts, gambling habits, and subscription services such as Netflix … Now, lenders are concerned home buyers are spending too much on sex workers — when in reality the money is spent on dinner.”
It all comes back to those little checkbook notes and transaction details we use to remind ourselves what a specific payment was for but may have never expected anyone else to read — or care about.
“If that person happens to be in the property market at that time, the bank’s going, ‘Hang on, what’s this?’ Particularly if there’s $50 here or $50 there,” finance broker Chris Foster-Ramsay explained. “[Banks ask,] ‘Is it for adult entertainment?’ … If that happens over a period of time, the bank is picking up on it.”
The issue is most common for millennials who may be in for a rude awakening when out to borrow some money.
“Bank statements are a legal document,” he added. “You have to be semi-serious about it. As fun as it may be, it’s not advisable to be creative in the transfer text.”
While lenders have a legitimate interest in ensuring that borrowers are able to repay their loans and can rightfully cite expensive or frequent recurring transactions as evidence of a lifestyle that may make repayment problematic, there is also the personal prejudice that porn can inspire, and which can play a role in the loan approval process.
Jodi McKeown of ProSolution Private Clients advised that in situations where an explanation might not be enough, applicants may wish to wait until any questionable items age past the required three-month transaction history.
“If there was something inappropriate or we thought we might get some questions that we thought we would not be able to answer appropriately, we might defer and wait another payment cycle,” McKeown noted. “As soon as one thing’s picked up, [the banks] just keep looking and looking.”
For many in the adult entertainment industry, this “looking and looking” is a familiar tale and one that fans may now be learning the hard way.
