Supreme Court Issues Notice on Plea Alleging Privacy Violations by Credit Score Companies
Debayan Roy (Bar  and  Bench) 10 May 2024
The Supreme Court on Monday issued notice in a plea alleging right to privacy violations by four foreign credit information companies operating in India (Surya Prakash v. Union of India and Others).
Despite none appearing for the petitioner, a three-judge Bench of Chief Justice of India (CJI) DY Chandrachud and Justices JB Pardiwala and Manoj Misra sought responses from the Ministry of Finance, the Reserve Bank of India (RBI), the Ministry for Electronics & Information Technology and the Ministry of Home Affairs. 
 
It also sought response from the four foreign credit information companies - TransUnion CIBIL, Experian Credit Information Company of India, Equifax Credit Information Services, and CRIF High Mark Credit Information Services.
 
The Court also appointed Advocate K Parameshwar as amicus curiae in the case.
 
"No one appears...we issue notice. Having regard to issues been raised, we appoint an amicus curiae in the proceedings. Advocate K Parameshwar appointed as the amicus. The petitioner appearing in person will be informed of the present order."
 
The petitioner claimed that these companies were violating individuals' right to privacy by collecting, capturing, storing, maintaining and processing confidential and sensitive financial data and all banking details of consumers without their consent. These actions are in violation of the Credit Information Companies Regulation (CICR) Act, 2005, it is claimed.
 
The plea argues that these four companies, in collusion with the RBI and Central ministeries, are committing blatant violation of the right to privacy of more than one billion individual private citizens and all the business organisations operating in the country. 
 
The petitioner argues that the principle of data localisation is blatantly violated, since the computer servers and even data storage systems of these companies are located outside India.
 
"The Respondents 5, 6, 7 & 8 after collecting ·the above mentioned sensitive data from all the Banks,' Financial Institutions and from various other sources, all illegally without the knowledge & by forced consent of the customers, literally dress up & repackage the sensitive confidential information of the customers and is put on SALE for all their members, for any type of lending institutions in the country or abroad and for the general public and profit from them in a very big way," the petitioner argued.
 
It is further claimed that a "parallel underworld economy" is thriving due to the credit scores and credit histories created by the four companies. Moreover, it is stated that the companies have an unethical, mutually beneficial business relationship with companies like Bank Bazaar, Paisa Bazaar, My Loan Care, Loan Adda and Credit Mantri.
 
It was also emphasised that these companies are involved in generating credit scores and prepare the credit history of each and every customer of every bank and financial institution of this country.
 
With the generation of credit scores and credit history from personal data, these companies pass judgment, convict citizens as 'untouchables' and discriminate against them based on creditworthiness, the petition argued. 
 
"Armed with the Credit Scores & Credit history the Respondents 5, 6, 7 & 8 completely dominate & control the entire Indian Banking ecosystem, literally deciding who should get all the Credit Facilities & who should not. Citizens who get low credit scores "are Financially Paralyzed for their entire lives thus making them incapable to achieve anything worthwhile in their entire lives and literally killing millions of honest struggling business entrepreneurs. This does not augur well for the benefit of the citizens & our country at large," the petition stated.
 
On these grounds, the petitioner sought directions from the Court to the RBI and the concerned ministeries to regulate data sharing by these companies. A direction has also been sought to ensure that these companies operate in line with the CICR Act, 2005.
 
Comments
s5rwav
2 months ago
In view of Serious Violation of Fundamental Right of Countless Indians, it is Impertaive that All the 3 Concerned Secretaies to Govt of India Must File Affidavits & Supreme Court Bench of 13 Judges Promptly Adjudicate the Matter.
yerramr
2 months ago
State Government contends that it is the employer de facto of a NBFC established by it although the Company is governed by its own Board decided policies and seeks data of all its employees. Data privacy is compromised in such cases as well. In the present case, Credit Information Companies, that too established post reforms in the banking and financial sector, have been certainly compromising on data privacy. The case may unfold new nuances in their functioning.
bvijayakumarca
2 months ago
Our consent is probably limited to the credit history concerning lending and the repayment history.
However, I suspect that the nature of spending is also captured and misused. Like for instance, how we are spending - for groceries, consumer durables, textiles, jewelry etc...

I request you to investigate this aspect also and bring it to the attention of the Hon'ble Supreme Court, if needed.
Kamal Garg
2 months ago
I think right to privacy and my ownership over my data and life is the most important thing beyond any question and doubt. How can someone collect your financial information and repackage it and sell it in the market place. Strict law enforcement should happen and the wrong doers should be severely punished as a deterrent to others.
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