By Ruth Jackson
Did you know that your bank tracks payments made into your account and shares that information with other companies? It's highly likely that you didn't. A survey of 4,000 Daily Telegraph readers found that 90 per cent had no idea that this was going on.
In a sign that Big Brother is alive and well in the banking industry, almost all of Britain's banks keep a record of incoming payments into their customers' current accounts. This means that they note your salary, investment income and payments between spouses, family and friends.
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This information is then passed on to credit reference agencies that sell it on to other companies.
Banks defend the practice by saying that the information is used to verify a customer's income if they apply for credit in the form of mortgages, loans or credit cards. But the data is gathered and passed on regardless of whether a customer is trying to borrow money.
CallCredit, one of the credit reference agencies using this data, told The Telegraph that banks are "very clear" with customers about the fact their income data is collected and traded. The survey suggests otherwise – nine out of 10 people have no idea the practice is happening.
It's hardly surprising that most people don't know. Have you ever bothered to read the terms and conditions for your current account? These booklets can run to over 50 pages and certainly aren't easy to read.
"Very few banks are upfront with customers about how they use their data. Most bury the facts in pages of information about their 'privacy policies'," James Daley of Fairer Finance, told the Telegraph. "The result is that consumers walk away with no knowledge of what is really going on."
A thorough read of the terms and conditions for two of my current accounts threw up no clear reference to income data sharing. HSBC and Lloyds have both admitted to the practice but fail to make it clear in their terms and conditions.
"It's quite understandable that people think that their current account information is private," says Daley. "If banks are going to allow it to be used in this way – they need to work much harder to let their customers know, and to get their consent."
At present tech users are up in arms about Whatsapp agreeing to share data with its parent company Facebook. As a result the Information Commission's Office – the data privacy regulator – has said it will monitor what data is shared between the two companies.
Whatsapp sharing details of my private conversations with Facebook so that they can bombard me with targeted advertising is wrong and I have made sure that I've opted out. But banks keeping tabs on my income and sharing that data, and then credit reference agencies profiting from selling it on, is of far greater concern. To make matters worse, I can't opt out as my permission has never been sought.
