Yesterday’s Sunday Telegraph reported that Lloyds Banking Group has followed in Barclays’ footsteps by announcing that it could use trillions of data entries from millions of customers’ accounts in order to detect if staff had wrongly sold insurance. Lloyds has justified the move, stating that it would be of “benefit to the customer”, but could this move be purely in the best interests of the bank?
Over the last few months we have seen an increase in reports of companies and banks mining customers’ data for commercial purposes: first it was Barclays and now it seems that Lloyds Banking Group are at it too. Barclays customers were rightly concerned when it was reported last month that the bank had announced that it was planning to sell customers’’ spending data to other businesses. Now it seems that Lloyds Banking Group is also considering using customers’ information for a different purpose: to check whether bank staff wrongly sold insurance.
Lloyds has said that it is prepared to sift through trillions of data entries in millions of accounts in order to identify customers, for example by seeing which customers had been sold breakdown cover but never appear to spend any money on petrol. Lloyds has said that this would be of “benefit to the customer”, but could this actually be a plan to get the Financial Conduct Authority, who has taken a tough line on poor value insurance policies, off its back?
In these cases there seem to be two motives. Lloyds has given a motive which appears to be in the consumer’s interest, but there is another motive, which is in the interest of the bank itself. With the Barclays case, the bank says it will be collecting customers’ data as a means to detect fraud. In this case, Lloyds says it wants to make sure customers use their benefits. If the regulator is putting Lloyds under pressure, there must be a way of addressing the matter that is less intrusive.
Both stories highlight the huge amounts of data already held about us by companies, often with scant justification for it being retained or used. Customers are kept in the dark about the way in which data is collected, how long it is stored for and how it can be used. The law needs to be urgently strengthened to give consumers proper control over their data and to ensure that companies are not prepared to use it unnecessarily and without consent.