Unmasking the Dark Side of Data Exploitation
In a dynamic and evolving digital world, personal data has become an increasingly precious commodity. Companies frequently mine this rich trove of information for their advantage, using it ethically or unethically. The latter case bears grave consequences, encompassing legal and financial repercussions and tarnishing reputations. But data subjects — regular people like you and me — often bear disproportionate downside risks.
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By gathering and analysing personal data, businesses gain insights into consumer behaviour and preferences, empowering themselves to tailor their offerings more precisely. But trouble brews when companies perpetrate — or fail to prevent — privacy law offences or unethically utilise personal data, resulting in reputational harm and legal ramifications. Data breaches exemplify such situations, usually stemming from inadequate data security measures and causing companies to face hefty costs linked to remediation, legal expenses, and reputational damage.
Broadly speaking, privacy law offences arise when companies handle personal data in ways that infringe upon the governing data protection statutes. These transgressions can encompass an array of missteps, such as neglecting to secure proper consent, divulging data to third parties without approval, or failing to implement sufficient security measures to defend personal data. Unethical data practices might be subtler than privacy law violations, but they can be just as pernicious and difficult to establish.
Data breaches: A Worldwide Problem
South Africa recently grappled with data privacy infringements when, in 2020, a data breach exposed the sensitive information of millions of citizens and approximately 800,00 thousand businesses. The compromised data, believed to have been sourced from credit bureau Experian, encompassed identity numbers and residential addresses. This alarming event underscored the urgent need for bolstering data protection laws and regulations within the country.
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Another illustration of data privacy law transgressions in South Africa is the 2018 ordeal faced by Liberty Holdings, a prominent insurance company. Cybercriminals pilfered data containing the personal details of over a million clients, such as names, ID numbers, and email addresses. Consequently, Liberty Holdings had to pay a substantial sum to its customers and suffered a severe blow to its market reputation.
These occurrences are not exclusive to South Africa; they pervade numerous low and middle-income nations. Data protection laws and regulations in these countries may be weaker or inadequately enforced, rendering individuals exceedingly susceptible to exploitation and mistreatment. A case in point is India, where the government’s Aadhaar scheme, the world’s most extensive biometric identity program, has proven vulnerable to data breaches and unauthorised access. In 2018, it emerged that the personal data of over a billion Indians were leaked online, encompassing names, addresses, phone numbers, and other confidential information. This stolen data, sold on the dark web for mere dollars, could be weaponised for identity theft and fraudulent activities.
And in Brazil, an astonishing data breach left over 200 million citizens reeling as their personal information, including names, addresses, and social security numbers, was exposed. Much like the Indian incident, these data were peddled on the shadowy corners of the dark web. The alarming breach sparked widespread unease regarding the government’s capability to safeguard the personal data of its citizens, subsequently fueling demands for more stringent data protection legislation. Such incidents underscore the fact that it’s not just the notorious behemoths of the tech world that falter in their duty to shield the sensitive data of individuals.
Deception and Manipulation: The Invisible Dangers
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Beyond data breaches, companies have devised alternative methods to exploit personal data. One such way is through dark patterns in their user interfaces. Dark patterns are deceptive designs that ensnare users into providing more personal data than intended. Companies may use complicated language, pre-selected checkboxes, and misleading options to coax users into surrendering additional personal data. These tactics enable companies to amass more data without the user’s full awareness and explicit consent.
In South Africa, there have been instances where companies used dark patterns to manipulate users into giving up their personal data. In 2018, telecommunications firm MTN was found guilty of employing dark patterns to dupe customers into subscribing to particular services. Subsequently, the company faced a ZAR 5 million fine and was ordered to reimburse affected customers.
Price discrimination is another unethical strategy companies use to exploit personal data. This practice entails charging varied prices for identical products or services based on individuals’ personal attributes, such as location, age, or gender. As a result, some individuals may end up paying more than others for the same offering, leading to unjust treatment.
Dark Patterns in Financial Services
Mobile money has become an increasingly prevalent payment method, enabling users to transmit and accept funds via their mobile devices. However, some mobile money firms were capitalising on users’ personal data without consent, promoting loans and additional financial products. Ghanaian media sources reported that certain mobile money companies were dispatching unsolicited messages to customers, marketing loans and other financial services. These communications contained personal data, including users’ names and mobile numbers, and occasionally featured misleading information, such as falsely asserting pre-approval for loans. These actions were viewed as infringements upon users’ privacy and a betrayal of trust. Customers were not even afforded the option to decline these messages, and their data was being exploited without consent. Moreover, some customers who had not granted permission still received these messages, suggesting that the mobile money companies may have acquired their personal data through alternative means, such as buying it from third-party sources.
The unethical handling of personal data by Ghana’s mobile money companies is not unique. Analogous practices are documented in other nations, including Nigeria, where mobile money firms have been charged with utilising personal data to promote loans and additional financial products without users’ consent. Such activities are particularly alarming in low and middle-income countries where weaker data protection laws and regulations render users more susceptible to exploitation.
In 2019, Kenya experienced a similar issue when several mobile money-lending apps were found to be collecting users’ personal data, such as contacts and call logs, without their knowledge or consent. The data was subsequently used to make lending decisions, including determining the user’s creditworthiness. This practice incited concerns regarding privacy violations and the exploitation of vulnerable individuals, prompting calls for more robust data protection laws and regulations in the nation.
The unauthorised use of personal data can yield grave consequences, encompassing legal and financial penalties, reputational damage, and the erosion of customer trust. In response, Ghana’s National Communications Authority (NCA) cautioned mobile money companies that they could face sanctions if they persisted in unethically employing personal data. The NCA also counselled customers to exercise vigilance when receiving unsolicited messages and to report any dubious activity to the appropriate authorities.
In summary, the unethical use of personal data by mobile money companies in several African countries constitutes a pressing issue that demands immediate redress. This situation underscores the need for more robust data protection laws and regulations that safeguard users’ privacy and ensure companies employ personal data ethically and responsibly. Governments, regulators, and other stakeholders must collaborate in tackling these issues and fostering a culture of responsible data use that benefits all parties.
The Path Forward: A Global Call to Action
Violations of data privacy laws and the unprincipled exploitation of personal data inflict damage not only to individuals but also to the broader economy and society. When people’s faith in organisations’ capacity to secure their data erodes, this can precipitate declines in innovation and economic activity. It is imperative for businesses to prioritise data privacy, both to shield themselves legally and to guarantee their ethical conduct. For governments, robust data protection laws and regulations are indispensable to ensure the safeguarding of individuals, irrespective of their location or income stratum.
To summarise, corporations’ transgressions of data privacy laws and other unscrupulous uses of personal data constitute a considerable global concern. Companies must recognise the significance of preserving personal data and ascertain their adherence to pertinent data protection laws and regulations. Governments, regulatory bodies, and other stakeholders must collaborate in addressing these challenges and fostering a culture of conscientious data use that is advantageous to all parties involved.
