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Private data, public business

As the law on privacy evolves, the financial services industry will have to clean up its act

Private data, public business

If the Supreme Court's elevation of privacy to a fundamental right is followed through in spirit, then the selling of financial services in India will have to change comprehensively. Compared to all other industries, it is the financial services industries that seem to base their sales efforts most heavily on widespread abuse of the personal information about their customers to which they are privy. Not just that, the contempt with which customers' financial data is treated has directly facilitated a widespread crime wave in which older and less tech-savvy people are subjected to digital robberies of their bank accounts.

Of course, if one were to believe the general tone of news and commentary in the media, the highest court's judgement was basically about Aadhar, and specifically about the linkage between Aadhaar and paying taxes. Personally, I'm in favour for the deepest possible linkages between Aadhar and Income Tax, and that's an opinion I've formed over the last three-four months while observing this debate.

Earlier, one would see a lot of people being mildly concerned about the possible privacy violations that might arise from the linkage between Aadhar and direct cash benefits or MNREGA or things like that. You know, the kind of stuff that concerns those other kind of people. And then came the linkages of Aadhar with PAN numbers and income tax returns and all hell broke loose. Overnight, it seemed, a huge number of people suddenly realised Aadhar was a tremendous privacy violation. All kinds of rich and powerful and beautiful and well-connected people suddenly started dedicating big chunks of their time to fighting this assault on their privacy.

Honestly, I have never seen this class of people being so deeply concerned about a public issue. It's very commendable. One could be forgiven for thinking that the right to use benami PAN numbers had been a fundamental right all along and has now been suspended. Or maybe, effectively, that's what has actually happened. Everything in life is a compromise and to my mind, catching tax cheats is exactly the kind of thing that makes Aadhar a more than acceptable trade-off.

Coming back to real data and privacy issues, it has now been pretty clear to everyone who has a bank account that all your details are casually handed over to anyone who is selling any kind of financial product. Telemarketers who know everything about you routinely call to sell services. That's not all. Newspaper accounts of solved digital robbery cases often contain details about the scale of information such criminals have. A few months ago, I wrote about a case where an old couple's money was transferred away by a gang of criminals who knew all details of their insurance policies and were thus able to convince the victims that they were actual insurance advisors. After solving the case, the police found that the gang had a database of such details for thousands of people.

In its judgement, the Supreme Court has pointed out that 'Informational privacy is a facet of the right to privacy. The dangers to privacy in an age of information can originate not only from the state but from non-state actors as well. We commend to the Union Government the need to examine and put into place a robust regime for data protection...'. Legal experts say that the actual law and practice will evolve as individuals come forward and claim that their right to privacy is being violated by some action that someone else is taking.

Can someone file such a case the next time they get a call from a personal loan or insurance telemarketer who is clearly privy to more data than they should? I don't know law so I can't answer the question but clearly, the days of playing fast and loose with customers data will come to an end at some point soon. One very interesting legal opinion I came across is that even if the customer agreement of a bank or an insurance company has clauses that are worded to allow them to violate your privacy and share your data, such contracts cannot override a fundamental right that the constitution gives you.

Perhaps it's time that those addicted to violating others' privacy to further their own business interests should start thinking of some new strategies.