Personal Information Bill may be limiting to financial intermediaries

30 April 2010 Metropolitan Retail
Herman Botha, Broker Distribution Executive at Metropolitan Retail

Herman Botha, Broker Distribution Executive at Metropolitan Retail

The Protection of Personal Information Bill (PPIB) was passed by Cabinet on 14 August 2009, but has not yet become law. If and when it does, the way in which information is collected, processed, stored and disseminated will change.

The PPIB is intended to protect individuals against the unlawful and sometimes intrusive collection and use of personal information. At the same time, however, legislators remain aware of the need for freedom of information flow. In essence, the PPIB seeks to balance both arguments, but at its heart is the protection of the individual and his or her right to control the dissemination of personal information. So far, there has been very little protection of personal information in South Africa – certainly far less than European countries.

For example, before contacting a new prospective customer, the intermediary must first check existing records to ascertain whether that individual has previously requested no further contact. If not, the intermediary may contact the person but the potential customer must be given the chance to terminate the conversation immediately. Only if the potential customer provides their consent, then further collection and processing of personal information is allowed.

The only instance in which it is lawful to process personal information without consent is where the company concerned is protecting a ‘legitimate interest’. For example, in the insurance industry a customer would have a ‘legitimate interest’ in an existing policy which he or she owned. Processing of personal information by the company, in order to protect this interest or right would be allowed such as holding onto their contact information.

The important thing to note is that these changes are imminent and will affect all aspects of how we deal with personal information on a daily basis.

For intermediaries, this is another instance where our industry is evolving and becoming more professional. Whilst all new Bills translate into added paperwork - firstly to understand the requirements and secondly to adhere to newly introduced processes and procedures - the long term benefits of a regulated industry which protects its customers are indisputable.

For individuals the benefits are clear: customers are protected against the unlawful use of their private information and are assured of a more professional approach from the industry.

Metropolitan supports the passing of this Bill as it will contribute to the ongoing reform of our industry, bring us in line with international standards and help in creating a sustainable future for all industry players.

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