another example of the Credit Card industry's deceptive advertising targeting children
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Tuesday, May 31, 2005


Credit Card Issuers in India are scrambling to obtain consent from their card holders to disclose information to third parties such as credit information bureaus like CIBIL. Now that Sarbajit Roy's HACKING COMPLAINT has speedily ensured that the "Credit Information Companies (Regulation) Act 2004" has been duly legislated, it is important for consumers to understand how to safeguard their privacy under this law. Protect your rights and learn to stand up against CIBIL and the Government.

  • Immediately send a written communication by REGISTERED POST / SPEEDPOST to all Banks and other Financial Institutions you have borrowed monies from.

  • Inform the Bank that with the Credit Information Companies (Regulation)Act 2004 shortly becoming law, that disclosure of "Credit Information" by the Bank/FI to any agency outside the Bank is impermissible without the specific consent of the borrower. Furthermore, that the said Act is for defaults of new debts and does not apply to old contracts where specific consent has not been granted.

  • Inform the Bank that you have never given specific consent to the Bank in the format laid down by the Reserve Bank of India permitting disclosure of credit information. (I cannot disclose the format given to the Banks by RBI, because I obtained these from CIBIL during the course of my Hacking Complaint. However, it is extremely unlikely that your Bank had obtained your consent in RBI's specific format - since only 10 insignificant Banks had done so).

  • Inform the Bank that you consider your Right to Privacy to be an over-riding Constitutional Fundamental Right which cannot be taken and/or signed away by any contract or agreement between yourself and the Bank.

  • Inform the Bank that any contract / agreement between yourself and the Bank (entered into prior to the passage of the Credit Information Regulation Act), continues to be governed by the Banking Secrecy Laws of India. Furthermore that all information and particulars "entrusted" to the Bank by you concerning the contract are Confidential and absolutely governed by the Laws of India only.

  • Inform the Bank that you are hereby specifically withdrawing all consents (implicit and/or explicit), if any, that the Bank would consider as permitting disclosure of any particulars concerning yourself an/or capable of identifying you to anyone other than an officer of the Bank.

  • Inform the Bank that you call upon them to immediately withdraw all information they may have circulated and/or published concerning yourself to any third party including a credit bureau. Furthermore that you all upon the Bank to inform you within 3 weeks that they have done so.

  • Inform the Bank that should they violate your Fundamental Right to Privacy, by disclosing any particular(s) capable of identifying you in any way whatsoever to any 3rd person including a credit bureau, that you will proceed against them and their officers jointly or severally as appropriate, including for criminal breach of trust.

  • Send a copy of the letter by SpeedPost to CIBIL. The address of CIBIL is contained in the Hacking Complaint. Search this website for the link to it. Inform CIBIL that there is no specific consent from you which would permit CIBIL to publish / circulate any information concerning yourself.

    Having said all this, lets read what Harjeet Ahluwalia has to say about this in "The Pioneer" newspaper of Delhi on 30 May 2005.

    Borrower under the scanner

    Harjeet Ahluwalia

    It looked no different than other promotional mailers, but this Citibank communication actually was. Quite late in the day, but it listed important terms and conditions regarding card fees, charges, dispute and defaults and, more importantly, it also described "disclosure":

    "As per extant business practices", the bank was authorised to share member information with any existing or future credit bureaux, and this sharing of "positive or negative performance/default" would be done without notice to the card-holder.

    All borrowers may not be fully aware of this, but dossiers are quietly being readied on an increasingly large number of loanees, but only of their borrowing records. For, creditor data is being shared with the Credit Information Bureau of India Ltd (Cibil). The fee-based information exchange mechanism for banks and financial institutions is also expected to help customers get better credit terms based on their borrowing track record.

    It compiles a credit information report (CIR) of a borrower's payment history from data supplied by different credit grantors to help them make more informed lending decisions. Different lenders may use a CIR differently, or take into account other factors when assessing an application. One bank may deny credit, while another could take a different view and accept the proposal, according to Cibil.

    Cibil and the norms governing it have been around for a few years now, but earlier only defaults above Rs 1 crore and suit-filed accounts came under its ambit. It is only of late that banks are routing wider borrower data to it as their networking systems master stacks of manually recorded information.

    Since the Reserve Bank guidelines for information-sharing are relatively recent, the more conservative public sector banks (PSBs) are still busy collecting mandates from long-standing borrowers (even the ones with a good repayment record) in order to avoid legal tangles. The more adventurous ones say they do not see the need for explicit consent, since it can hurt only defaulters and anyway data-sharing is now a regulatory requirement. However, all loans are now processed with the new rule incorporated at the application stage itself.

    Where does this leave customers? More wary, perhaps, of defaulting and somewhat apprehensive of their borrowal records coming into the public domain. Yet, the larger picture suggests that individuals and commercial entities alike who recklessly resort to credit from uninformed, and therefore unsuspecting, lenders may be deterred to a large extent and prospects of more non-performing assets piling up would diminish.

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