HSBC to share credit records

Banks and credit card companies will be given access for the first time to previously secret information about millions of HSBC current account customers, after the bank announced yesterday it will share the full credit record of its personal customers with other regulated financial services companies.

HSBC said the move, believed to be the first by a high street bank, showed it was a responsible, well-informed lender. It said data sharing among financial services companies would help prevent excessive lending to individuals who cannot afford to repay loans and interest on overdrafts.

From August 1, the bank will share positive and negative customer details on all personal credit products through the UK's three main credit reference agencies: Experian, Equifax and CallCredit. The bank will check potential customers' positive and negative credit records through Experian, the UK's largest agency. Currently most banks only share negative data on customers applying for loans and credit cards. Banking analysts believe fears of predatory marketing to bank customers, once it becomes known which products they use and the interest rates charged, has been the main barrier to most banks joining data-sharing networks.

The new arrangement will affect 5m of HSBC's 9.4m personal customers who have taken new or revised products after changes to banking regulations in 2002, which included consent to data sharing under the 1998 Data Protection Act. There have been several claims in recent months of excessive lending by banks.

John McFall, chairman of the Treasury Select Committee, has campaigned for years to persuade banks to share data. He said: "Positive data sharing is a good move and a responsibility British banks need to get on with. We have been calling on the industry to make progress in this area for some time."