Barclays Among Banks Breaking Privacy Rules, Consumer Group Says

Barclays Plc (BARC), Banco Santander SA (SAN) and six other lenders are suspected of breaking rules on protecting customer data a total of more than 500 times in one year, the U.K. consumer rights group Which? said.

Complaints filed through August 2010 with Britain’s privacy watchdog, the Information Commissioner’s Office, include claims that banks failed to give customers copies of data held on them, failed to follow security rules and gave data to third parties, the consumer group said today in a statement.

Financial institutions “hold incredibly sensitive information and the impact on customers can be serious if they mishandle it, from affecting credit ratings to leaving people open to fraud,” Which? Executive Director Richard Lloyd said in the statement.

The customer rights group said the problem could be much worse, since 87 percent of U.K. citizens haven’t heard of the privacy watchdog and therefore can’t file complaints. Filings have nonetheless been on the rise, the group said, with complaints against financial services firms rising about 10 percent in 2009, to 1,163 from 1,060.

Which? said Barclays had the most complaints with 116 filings in the year through August 2010.

Elizabeth Holloway, a spokeswoman for London-based Barclays, said the figures supplied by Which? are too high because about half of the complaints were found to not be violations.

‘Considerable Lengths’

Santander, which attracted 103 privacy complaints in the period, goes to “considerable lengths” to protect customer data and the ICO complaints represent a small fraction of its 25 million U.K. customers, said spokeswoman Lara Lipsey.

Brian Capon, a spokesman the British Bankers’ Association, a trade group, said many of the cases stem from claims-handling companies, which dispute their customers’ records in order to try to strike out credit agreements.

About 20 percent of complaints against financial institutions are upheld, ICO spokeswoman Kirsty McCaskill said in an e-mail. Of those that aren’t, many concern customer- service issues, she said.

“While the number of upheld complaints is small compared to the millions of bank accounts in the U.K., mishandling of financial information can have a serious effect on individuals’ lives,” McCaskill said.

To contact the reporter on this story: Erik Larson in London at elarson4@bloomberg.net.

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