American Express has written to its cardholders that it will report financial information on their cards to National E-Governance Services Ltd (NeSL) from next month, a move that has upset cardholders who fear it could compromise their privacy.
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 notice, but the drive was shelved after many cardholders raised privacy concerns.
reason for moving
“In accordance with applicable regulatory guidance on the transmission of financial information to Information Utilities (IU), we would like to inform you that from November 2022 we will begin reporting your card information to National E-Governance Services Limited (NeSL),” American Express wrote in the email.
Cardholders will receive a monthly email notification from NeSL to review and verify the information sent by American Express on an ongoing basis, and they will need to register on the NeSL portal to authenticate or contest the information within a set time limit of the communication .
An email sent to American Express was not immediately responded to.
In the Frequently Asked Questions (FAQ) section of its website, American Express has mentioned that under the Reserve Bank of India (RBI) Regulation of December 2017, all banks are required to report cardholder financial information to NeSL.
The RBI regulation of 19 December 2017 states: “A financial creditor must transmit financial information and information relating to assets in respect of which a security interest has been established to an information utility (IU) in a form and manner permitted by regulations can be specified.”
NeSL was registered as the first IU by the Insolvency and Bankruptcy Board of India (IBBI) on September 25, 2017. NeSL’s primary role is to serve as a repository for legal evidence containing debt/claims information as submitted by the financial or operational creditor and verified and authenticated by the debtors.
American Express said in the FAQ that it will only report existing debt information, as available in its systems of record, to NeSL to comply with regulatory requirements and does not expect any additional information from cardholders.
In addition, American Express cardholders stated that they were never informed about this regulation when the credit card was first issued.
Legal experts believe that sharing personal financial information related to cardholder spending with businesses, including government-registered businesses, is a violation of their privacy.
Customers have now become more cautious about how their data is used and are reluctant to share their sensitive personal information with third parties.