Forget selling phones, how about selling customer data?

19 November 2009

Forget selling phones, how about selling customer data?

By Muhammed Poswall

The UK's fourth largest mobile phone operator T-Mobile has been at the centre of data protection and confidential information legal issues, with members of staff selling details of T-Mobile's customer contract renewal information to third party brokers.

The information was then passed to rival phone companies who called customers offering them a better mobile phone deal once their contract expired. T-Mobile alerted the Information Commissioners Office (ICO) once it became suspicious of unlawful trading of customer data. The ICO is now analysing the evidence with an aim of prosecuting those individuals involved.

With 16.6 million customers T-Mobile has approximately 15% of the UK's mobile phone market and is currently in talks to merge its UK operations with Orange, so any sale of customer information makes this one of the largest instances of unlawful trading in personal data, with it likely that the data of millions of customers being sold.

Whether it be the MoD or HMRC losing data, bank details being sold on Ebay or customer information being sold to rival mobile phone companies, customer information is fast becoming a valuable asset that needs protection from fraudsters and individuals looking to make a quick buck.

Currently it is a criminal offence to unlawfully trade in personal data, with a potential fine of £5,000 being imposed for a successful prosecution. There is no doubt that the punishment is far too lenient, to combat this problem the Government is proposing a two year jail sentence for breaching data protection legislation.

The question is how can an organisation protect it is customers information from disgruntled employees? Tougher penalties and more powers for the ICO is definitely one solution, but the duty to protect customer data must rest with the company collecting the information, and they must ensure that they comply with all relevant legislation and procedures. For more information on how you can protect the data of your customers and ensure you comply with the requirements of the law contact Michael Coyle at michael.coyle@lawdit.co.uk.

Muhammed Poswall is a legal assistant to Izaz Ali (Izaz.Ali@lawdit.co.uk) Izaz is a commercial lawyer who specialises in information technology law and intellectual property law with an emphasis on IT, escrow, online and off-line contracts, and the buying and selling of online businesses.