NAB accused of 'spying' on customers who move business to rival banks

NAB accused of 'spying' on customers who move business to rival banks

National Australia Bank has been accused of 'spying' on business customers who apply to rival banks for new financing.

The bank has been getting tip-offs from credit reporting agency Veda when another bank or lender credit-checks customers. The shady practice came to light after a customer who applied to a rival bank for auto-financing was shocked to receive a counter-offer from NAB offering improved quotes.

NAB is not alone in using Veda to get prompt reports on customer credit checks, but the active response has raised concerns about 'big Brother'-style business practices and privacy invasion.

Veda - which has refused comment on how the early-warning system works - is no stranger to controversy, having been accused in the past of illegally selling data to marketing coanies. The company was bought out by Equifax for A$2.5 billion earlier this year.

In a statement, NAB says the triggers from Veda helps it to get a more rounded picture of customer behaviour and whether they are "operating their businesses prudently".

Says the bank: "We believe it’s important that our bankers keep in touch with their business customers, especially when they are taking out new lending with other institutions, to understand the intent of the finance and how it will impact on their business operations."

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 21 June, 2016, 16:59Be the first to give this comment the thumbs up 0 likes

Finsurgents have been telling banks to unlock the power of customer data for cross/up selling.

Analytics or Hair Splitting?

NAB has now shown how just well banks can do that. Hope finsurgents are cheering.

There's the small matter of customer privacy but I don't see anyone talking about it when regulators tell banks to share customer data with fintechs. So it shouldn't matter when the data flows in the reverse direction either.