Around six in 10 Indians have reported personal data breaches by their loan providers with around 59% saying they were approached by alternate service providers in the last five years, a survey by Local Circles has shown.
Around 40% respondents with existing insurance policies said they had been approached with a “detailed competitive offers”. Further, 34% respondents with bank accounts said they were approached with offers to open similar accounts.
“Most respondents hold the last mile of financial institutions, and in many cases, employees responsible for the breach… They believe data protection law must create strong disincentives for compromising personal financial information of citizens,” the Local Circles survey report said.
The study reportedly received over 41,000 responses from citizens located in over 319 districts of the country. While 64% respondents were men, 36% respondents were women. Around 45% respondents were from tier 1, 33% from tier 2 and 22% respondents were from tier 3, 4 and rural districts, Local Circles said.
“On an aggregate basis, the survey found that, 59% of those with an existing loan have received detailed alternate offers to switch to another lending institution either via email, phone call, SMS, whatsapp, etc within the last 5 years. This indicates a massive data breach as the sender has access to an individual’s personal loan data which is being used to send unsolicited loan offers,” the report survey findings said.
It added that around 40% citizens who hold an insurance policy received detailed alternate offers to their policy, “indicating that someone has access to not just their PAN, Aadhaar but also how much insurance they carry, their premium and when does their policy expire.”
The study put forth the possibility of bank and insurance company employees carrying personal and business information of the customers with them to their next place of employment when they switch jobs.
“The front-line staff of most of these financial institutions works with customers using their personal phone and WhatsApp and when any such individual leaves the organization, the personal financial data of the customers goes with them, leaving them highly vulnerable to theft and fraud. Most commonly, the same individual joins another competing financial institution and the same customer gets an unsolicited request to avail of a similar financial service by that company.”
The study has called for a strong data protection law with clear disincentives for non-compliance, implemented effectively by financial institutions at every level. “As the Government of India looks to release its draft data protection bill for public feedback and parliamentary debate, they must address all the above issues raised by the citizens to safeguard personal financial data of all citizens,” it said.
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