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By Polly Raymond, 29 November 1999 00:20

NEWS Privacy lobbyists are calling for more clarification over Inland Revenue plans to mine loyalty scheme customer databases to expose tax fraudsters. The Revenue claimed last week that it has a statutory right to obtain consumer spending data from retailers like Sainsbury's and Tesco just as it can demand financial statements from the banking community (see 'Inland Revenue stakes claim to loyalty card databases' http://www.silicon.com/a34285 ). But lobbyists claim that the framework for using loyalty scheme data should be clarified before the Revenue is given a free rein to use it in their tax crackdowns. "The Revenue should say whether they anticipate whether these methods will become routine and systematic. If so, the viability of loyalty card schemes may be called into question," said Caspar Bowden, director at lobby group Foundation for Information Policy Research. Yaman Akdeniz, director of another privacy group, Cyber Rights & Cyber Liberties, agreed that more detail is needed and pointed out that locking retailers' data collection techniques into formal tax investigation needs regulation. "It's a different kind of information. Supermarkets are not banks. We need to be very clear about how they collect the data and make people aware that data collected through these schemes are going to be made available to the authorities," he said. Chris Ellison, founder of Internet Freedom, is not only demanding clarification but a complete ban of this practice. He believes that the Inland Revenue shouldn't be drafting in the supermarkets as agents in their monitoring practices. "Inland Revenue may have a statutory right to obtain information for tax investigations but the supermarkets do not have a statutory right to collect the information for them. It's not right that those people with loyalty cards should be under more scrutiny than those people without them," Ellison said. The Data Protection Registrar which acts as the government's guardian of consumer privacy through the Data Protection Act is currently assessing whether current tax management law does include loyalty scheme data. In the meantime the Inland Revenue is under the impression that it does have the right to access Sainsbury's and Tesco databases although both supermarkets insist that right has not yet been exercised.