American Express has written to its cardholders to tell them it will release financial information about their cards to National E-Governance Services Ltd (NeSL) from next month, a move that has angered cardholders as they fear that this will put their privacy at risk. .
This is the second time this year that the company has informed cardholders that their data will be shared with NeSL. In April 2022, American Express issued a similar communication, but the reader was put on the back burner after many cardholders raised data privacy concerns.
Reason for moving
“In accordance with current regulatory guidelines on the submission of financial information to Information Utilities (IU), we would like to inform you that we will begin reporting your card information to National E-Governance Services Limited (NeSL) from November 2022 “, American Express wrote in the email.
Cardholders will receive an email notification from NeSL on a monthly basis to review and verify the information American Express will submit on an ongoing basis and they will be required to register on the NeSL portal to authenticate or dispute the information in a stipulated time, according to the communication.
An email sent to American Express did not elicit an immediate response.
In the Frequently Asked Questions (FAQ) section of its website, American Express mentioned that according to the December 2017 Reserve Bank of India (RBI) Regulations, it is mandatory for all banks to disclose the financial information of cardholders at NeSL.
The RBI Regulations of 19 December 2017 state: “A financial creditor shall submit financial information and information relating to assets over which security has been created, to an Information Service (IU) in the form and manner specified by regulation. .”
NeSL was registered as the first UI by the Insolvency and Bankruptcy Board of India (IBBI) on September 25, 2017. The main role of NeSL is to serve as a repository of legal evidence containing information relating to any debt/claim, such submitted by the financial or operational creditor and verified and authenticated by the parties to the debt.
American Express in the FAQs said it would only provide NeSL with existing debt information as available in its systems of record in order to comply with the regulatory requirement and that it was only seeking no additional information from cardholders.
Additionally, American Express cardholders said they were never made aware of this regulation when the credit card was initially issued.
Legal experts believe that sharing personal financial information related to cardholders’ spending with any entity, including a government-registered entity, is an invasion of their privacy.
Customers have now become more cautious about how their data is used and are hesitant to share their sensitive personal information with any entity.