Barclays to sell customer data on to third parties

Barclays is to sell off behavioural information about its customers. Could you be affected?

Barclays has decided to start selling its customers' personal information to the highest bidders.

In a letter being sent to each of the bank's 13 million customers, Barclays announced that it is to begin selling information about their spending habits to third parties. However, the bank assured its customers that they would not be individually identifiable from this information. Instead, data will be aggregated to show broader trends and patterns in consumer spending.

In this letter, Barclays explains what customer details it holds. Although the bank claims that all data will be 'anonymised', it warns customers that the info being sold "may include images of you or recordings of your voice". In addition, Barclays will harvest and use comments directed towards the bank on social-media sites including Facebook and Twitter.

These changes to Barclays' data management will take effect from 9th October.

Barclays is watching you

Despite various reassuring messages, it's clear that the bank intends to closely monitor customer spending on various products and services. This tracking of personal behaviour is something that many will object to, with several already taking to news sites and message boards to warn Barclays that it faces losing their custom.

Furthermore, Barclays admits that as well as sharing customer info with other companies, it may also share the data with Government departments and Members of Parliament. This would be useful for MPs, who can then use this information to better understand their constituents' needs.

Potentially the most sinister aspect of the bank's is the admission that Barclays will collect "location data derived from any mobile device details you have given us". This would enable the bank to place customers at precise locations, giving it yet more valuable info on your behaviour.

Then again, Barclays says that such location data would only be used to prevent fraud. When the bank's fraud-detection system spots a suspicious transaction, it would 'ping' a customer's mobile phone to check 'at a country level' whether the transaction is bogus or genuine. If the customer's mobile is in one country when a transaction takes place in another, a fraudulent withdrawal or purchase could be rejected.

Nothing sinister

Fearing a backlash from angry account holders, a Barclays spokesperson said that there is "nothing sinister going on". Despite this reassurance, selling customer data to third parties for profit is sure to raise accusations of '1984'-style surveillance by 'Big Brother' Barclays.

Of course, all private companies (and Government departments) routinely gather a wide range of data on their customers' behaviour. However, in almost every case, this information is only used internally, often to improve customer service, product design and marketing.

Clearly, Barclays has thought long and hard before taking this step, having sought advice and guidance from the Information Commissioner's Office (ICO). Nevertheless, the initial response has been hugely negative, with customers threatening to leave the bank in droves.

As well as driving away existing customers, this plan may discourage new customers from joining the bank.

No opting out

Barclays states that: "Customers are always able to opt out of marketing activity and their personal data will never be passed on to anybody else without their explicit consent." However, the bank admits that the only way for people to be removed from this particular programme is to close their accounts and switch banks.

'Join in or leave' is hardly the right response to those customers worried about data privacy, now is it, Barclays?

What's in it for us?

Although many other major businesses package and sell their customer data in this way, Barclays has broken ranks with the big banks. The other three of the 'Big Four' -- HSBC, Lloyds Banking Group and Royal Bank of Scotland -- have not (yet) introduced this kind of data-mining to sell on for gain.

However, many corporations actively collect and use our personal data -- often to improve their success in selling to us.

For example, Tesco launched its Clubcard loyalty programme two decades ago in order to gain more insight into consumer behaviour and spending. Twenty years on, Clubcard is regarded as a huge success, helping to boost the supermarket's profits through targeted vouchers, promotional campaigns and advertising.

The success of Clubcard -- and its uncanny ability to market to Tesco customers -- led other major retailers to follow in the firm's footsteps. Millions of us carry loyalty cards in our wallets and purses, such as the Nectar card (accepted at BP, Sainsbury's and many other outlets) and Boots Advantage card.

Then again, the thing about these and other loyalty cards is that users are rewarded for using them with points, vouchers, discounts and other freebies. Barclays, on the other hand, is to sell on its customer data for profit, but without its customers getting a single penny.

Are you a Barclays customer? What do you think about the move? Let us know your thoughts in the comment box below.

More from Lovemoney:

The top fixed rate savings bonds

Get paid £100 to switch banks

Your 'to do' list is costing you money

Credit card small print traps to avoid