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IT’S time consumers in India demanded a privacy law that prohibits companies from sharing, selling or misusing crucial personal information given by their customers for a particular purpose, a law that binds the company to maintain the confidentiality of any information given to them. When you put in an application for a loan or even a credit card, you are asked to fill in forms that require you to give a detailed statement of assets and liabilities, income and expenditure. Now this information is private and strictly confidential or so you believe. But today, these privacy principles are being blatantly breached by companies that find it profitable to sell this information to other companies or marketing agencies or even use it themselves for cross selling of their other services and products. On the one hand, your personal information no longer remains private, while on the other, marketing agencies that obtain your financial profile harass you with offers of goods and services through the telephone, cell phone and the internet. In May this year, the Reserve Bank of India (RBI) expressed concern over this trend. Apparently in August 2002, the RBI had instructed all the banks to collect certain information about the customer at the time of opening an account, under the head "Know your customer." The requirement was meant to prevent financial frauds, use of banks for money laundering and for funding terrorist activities. However, the RBI noticed that while complying with this requirement, the banks were also collecting a lot of additional personal information and using it for purposes other than what the RBI had intended it to be. Pointing out that the information collected from the customer was being used for cross selling of services of various products by banks, their subsidiaries and affiliates and sometimes such information was also being provided to other agencies, the RBI reminded the chief executives of all commercial banks that the information provided by the customer was confidential and divulging any details thereof for cross selling or any other purpose would constitute breach of customer confidentiality obligations. The RBI also made it clear that wherever banks desired to collect any information about the customer for a purpose other than KYC requirements, it should not form part of the account opening form. We need a law that protects consumers’ privacy and prevents financial institutions and others from misusing or passing on personal information given for a particular purpose. A privacy law coupled with a law that prevents unsolicited calls from telemarketeers would also put stop to the telemarketing menace that is haunting consumers in India today. Meanwhile, before parting with any personal information, ask the company for its privacy policy and get an undertaking (in writing) that it would not be used for purposes other than the one for which it is being sought. |
