The London-listed firm Experian PLC (EXPN.L) is facing a £20m ($26.07m) fine or 4% of its total annual turnover if it fails to respond to a UK data watchdog enforcement order over ‘significant data protection failures.’
The notice issued on Tuesday follows a two-year investigation by the Information Commissioner’s Office into how Experian, Equifax and TransUnion used personal data within their data broking businesses for direct marketing purposes.
A complaint from the campaign group Privacy International to the ICO also raised concerns about the data broking industry, specifically Equifax and Experian.
ICO said that Experian had to make changes within nine months or risk further action.
“The ICO found that significant ‘invisible’ processing took place, likely affecting millions of adults in the UK,” it said in a statement. “It is ‘invisible’ because the individual is not aware that the organisation is collecting and using their personal data. This is against data protection law.”
Experian said it disagreed with the ICO order and plans to appeal against the decision.
The company’s shares have been falling on Tuesday, down about 0.3% at 2pm in London.
The ICO notice concludes a two-year investigation, with the results published in a report out on Tuesday.
The investigation found that the businesses – Experian, Equifax and TransUnion – were trading, enriching and enhancing people’s personal data without their knowledge. This processing resulted in products which were used by commercial organisations, political parties or charities to find new customers, identify the people most likely to be able to afford goods and services, and build profiles about people.
The agency said it was not taking action against Equifax and TransUnion as they had made improvements and withdrew some products and services.
Experian did not accept that they were required to make the changes set out by the ICO, and as such, were not prepared to issue privacy information directly to individuals nor cease the use of credit reference data for direct marketing purposes, according to the ICO.
The watchdog also called for Experian to stop using personal data derived from the credit referencing side of its business by January 2021, which it does currently for limited direct marketing purposes.
“At heart this is about the interpretation of GDPR and we believe the ICO’s view goes beyond the legal requirements,” said Brian Cassin, chief executive officer of Experian, in response to Tuesday’s ICO announcement. “This interpretation also risks damaging the services that help consumers, thousands of small businesses and charities, particularly as they try to recover from the COVID-19 crisis.”
The company added that all enforcement actions will be “stayed pending the appeal.”
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