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Banks to share more client data

Privacy concerns raised over plan to tackle bad debt by swapping customers' credit card details


ENOCH YIU


Hong Kong's banks have agreed to radically extend the information they share about customers' credit card histories in an attempt to tackle a growing bad debt problem.

But the idea is causing concern for the Privacy Commissioner, who fears that such procedures could offend prudent customers.

Under the proposals, banks would be able to ask each other for so-called "positive information", such as how many cards a customer held and his or her credit limit, before deciding whether they would issue a new credit card.

However, the move will not be implemented until the banks can get approval from the Office of the Privacy Commissioner for Personal Data because of concerns over personal privacy.

At the moment banks can only share "negative information" about clients, such as details on customers who have failed to repay a bank loan.

In the past, many banks said they would refuse to share positive information in case they passed on valuable details to rivals.

However, the Hong Kong Association of Banks (HKAB) told the Government yesterday that the banks now wanted to share such information once the privacy code was amended.

"This would help banks to stop issuing new cards to a client who may have too many credit cards," said Stephen Ip Shu-kwan, Secretary for Financial Services. "This would be important to help tackle serious credit card bad debt problems."

The proposed measures were revealed yesterday after a meeting between banks, government officials, the police, the Privacy Commissioner and the Hong Kong Monetary Authority at the Official Receiver's Office, aimed at finding ways to handle the growing problem of credit card debts.

The Government and banks have been forced to take a serious look at the problem because a record number of people have failed to repay credit card loans in the past year amid an economic downturn that has forced many out of work.

Delayed payments for credit card debts almost doubled during the past year.

Mr Ip said the Government supported the HKAB's proposals on sharing positive consumer credit data. The Monetary Authority will follow up proposed amendments to the privacy code with the Office of the Privacy Commissioner for Personal Data.

Privacy Commissioner Raymond Tang Yee-bong said the office needed more details before deciding whether to support proposals to change the code.

"From the public interest aspect, the sharing of positive data of individual bank customers would have a far greater impact on personal privacy than sharing of negative data," he said. "The profiling of an individual who is a prudent customer is intrusive and in some cases may be offensive to the feelings of the individual."

On the other hand, he admitted that borrowers had an obligation towards other members of the public, and they should disclose information about their credit history when they applied for bank loans.

He said a balance would need to be achieved between privacy and disclosure issues.

Democratic Party information technology spokesman Sin Chung-kai said if positive information was to be shared, customers had to be fully notified about what kind of information would be given to the other banks.

At the meeting yesterday, the police and the Official Receiver said they would step up enforcement efforts to crack down on credit card-related fraud.

Victor Lo Yik-kee, Chief Superintendent of the Commercial Crime Bureau, said the police were looking into 60 cases in which people allegedly applied for a large number of credit card loans from many different banks in the knowledge they would soon go bankrupt.

Mr Lo said this could be a criminal offence with a maximum penalty of 14 years' jail.

To help give banks early access to information on people who have lodged a petition for bankruptcy, the Official Receiver would provide the names of such people and the first three digits of their identity card numbers.

Published on South China Morning Post January 16, 2002

Created on 2002-01-16 15:22:26 by HKCCMA.

Last Edited on 2011-04-10 15:22:26 by HKCCMA.