Amex suspends credit card data sharing plan with NeSL after customers report privacy concerns
American Express (Amex) has suspended its customer data sharing plan with National E-Governance Services Limited (NeSL), the company said in a statement. E-mail sent to one of his clients.
Earlier on March 1, Amex sent an email to its credit cardholders stating that it would share financial information about their card accounts with NeSL beginning in April 2022. Amex cited a 2017 RBI circular as the reason for this decision, but cardholders and other experts have raised concerns about the legality of this data sharing mandate by RBI, as well as the privacy and security implications of this data sharing. priority it establishes for the future sharing of financial information of Indian citizens.
Read: In-Depth Analysis – The privacy implications and legality of RBI’s mandate to banks to share credit card information with NeSL
Reacting to Amex’s decision to backtrack, Srikanth Lakshmanan of Cashless Consumer Collective, tweeted:
“Small victories to keep your eyes peeled. We need more watchful eyes to #SaveOurPrivacy”
Lakshmanan had previously criticized Amex’s decision to share data with NeSL for going against the Credit Reporting Companies (Regulation) Act 2005 and for taking place without any law. support.
Why has Amex suspended data sharing?
In the email dated April 2 and sent to Amex cardholder Vasundhar, Amex said:
“In accordance with the matter highlighted, we have previously informed you that we will begin sharing your card account information with NeSL in April 2022. This has been postponed while we are in discussion with RBI regarding this. We would like to inform you that our actions are strictly based on the regulatory directives received by the Bank. The security of your data is of the utmost importance to American Express and we ensure that data is not shared with any unauthorized entity. We hope this clarifies your concerns. (emphasis ours)
Several Amex customers who spoke with MediaNama earlier in March had raised concerns about the proposed data sharing. Vinayak Hedge, an Amex cardholder who was the first report the problem on Twitter, said the sharing appears “to be a misinterpretation of the law and/or bureaucratic excess. Sharing personal credit card spending information with government agencies without consent. Speaking to MediaNama, Hegde outlined the following key concerns:
- Non-opt-out of this sharing
- Not clear how much data will be shared
- No idea how data is kept by NeSL and if there is a purpose limitation
- No clarity on the purpose of sharing individuals’ data under corporate laws insolvency
“I just bought a credit card and there was nowhere in the contract that this data will be declared. My only option now is to cancel. But then I have subscriptions and stuff on this card and it’s a headache to get new cards.It also affects your CIBIL score, a three-digit numeric summary of your credit history. Again, there is a degree of lock-in, for lack of a better word. Not exactly locked, but something similar. There is friction. – Haie Vinayak
It seems that concerns such as those raised by Hegde could have caused Amex to change its mind. However, Amex has not yet informed all of its customers of this development.
MediaNama has reached out to Amex for a more detailed explanation of their decision, as well as their discussions with RBI, and will update this post once we receive it.
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