90pc of bank customers unaware their income details are tracked and shared - and it's legal

Wallet showing bank cards
Banks continuously record customers' income, which they then share each month with other businesses

In a poll of more than 4,000 readers, nine out of ten said they "had no idea" their monthly incomes were being recorded by their bank and then shared with other companies, analysed and traded.

The poll was conducted within an article highlighting the rapid growth of banks' and other firms' use of individuals' income data, which can include payments between spouses and friends, as well as wages and investment income.

Almost all of Britain's banks now record most current account customers' monthly incoming payments. This is distributed monthly to credit reference agencies who then sell the data on.

Unlike their credit history, which consumers can demand to see, the income data is not made available to individuals.

Banks claim the information helps verify borrowers' income when they apply for mortgages. The data, however, is automatically collected each month, regardless of whether people are seeking credit.

In the past, applicants for loans would provide income detail which could be checked against bank records at that time.

But the continuous reporting of income data is now routine, banks admit. Millions of people who have no debts and no intention to borrow are nonetheless having their income tracked and traded.

When asked the question "did you know your bank collected your income details each month and passed on the information", 88pc of 4,100 respondents answered "no, I had no idea."

The other 12pc said they were aware of the practice.

The poll outcome contradicts assertions by CallCredit, one of Britain's three major reference agencies, that banks were "very clear" with customers about the fact their income data would be collected and traded.

The BBA, which represents the banking industry, refused to comment on the adequacy of banks' disclosure to customers of how their income data is tracked and shared.

Nor did it reply to our questions as to why just 12pc of such a large sample of customers were aware of their banks's use of their data.

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Many banks' current account terms and conditions run to books of more than 50 pages. Sections relating to data and privacy generally appear at the end.

Telegraph Money was unable to find any clear references to income data sharing in HSBC's 50-page Ts&Cs booklet, for example. The bank admitted to collecting and sharing income data but refused to comment on where this was explained in its notes.

In the case of Lloyds, a large privacy section also refers customers on to a further document - containing pages about data use, but not clearly describing the data itself.

James Daley of Fairer Finance is an authority on Ts&Cs, and campaigns for banks to make them shorter and clearer.

He said: "Very few banks are upfront with customers about how they use their data. Most bury the facts in pages of information about their 'privacy policies'.

"And the result is that consumers walk away with no knowledge of what is really going on. It’s quite understandable that people think that their current account information is private.

"If banks are going to allow it to be used in this way - they need to work much harder to let their customers know, and to get their consent.

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