truecaller: Viceroy targets child safety and data protection of minors in second Truecaller report

Mumbai: After shedding light on potential tax evasion and redundant business model, activist short seller Viceroy Research turned its attention on Thursday to how Truecaller’s software collects data from minors, a sensitive issue given the increased focus on data privacy globally.

Shares of Truecaller, backed by Sequoia, fell more than 2.3% during the day to 39.99 Swedish krona (SEK).

This follows its more than 20% rout on the Nasdaq Stockholm Large Cap stock market on Wednesday.

Viceroy Research, a US-based international investigative financial research group, said it has responded to calls from concerned data protection specialists in India regarding how Truecaller handles minor consent.

Granted, Truecaller’s privacy policy states that the company does not intentionally collect data from anyone under the age of consent required to enter into binding legal contracts.

Indian contract laws do not recognize minors – persons under the age of 18 – as competent persons to enter into a contract with. Obtaining the consent of the child has no legal validity in the country and therefore the consent of a guardian is essential.

“Truecaller registration does not ask for a user’s age (only access to all their other personal information). Truecaller indiscriminately collects data from users under the age of 18 in India, and even in worldwide,” said. “This data is uploaded to their public directory. Truecaller’s enhanced search spyware indiscriminately extracts contact data from minors and uploads this data to its public directory. Users cannot obtain the unilateral consent of their contacts, particularly if those contacts are minors. The data of minors (and of all users) is actively accessible to strangers online without their consent.”

A Truecaller spokesperson said the company had no comment at this time.

Truecaller is a software company that offers a global platform to verify contacts and block unwanted communications and calls.

Citing a Unicef ​​study, Viceroy said about 20% of India’s population is between 10 and 19 years old and are early adopters of the technology. “We believe minors make up a substantial portion of Truecaller’s user base and non-user repertoire.”

India is the largest market for Truecaller, which saw sales increase by 133% in the January-June period with 235.5 million monthly active users (MAUs) and 194.4 million active users dailies. It contributes nearly 80% of Truecaller’s revenue and more than 70% of daily active users, while 63% of its workforce is based in the country. Truecaller has, in some markets, also launched financial services for businesses.

According to research by McAfee, some 22% of Indian children have experienced cyberbullying at some point, 5% higher than the global average of 17%.

According to the study, smartphone use in the country among children aged 10-14 is 83%, which is 7% higher than the international average of 76%.

Viceroy said there was a registration screen for new Indian users and the enhanced search feature was available and automatically checked for non-European users on Truecaller until Wednesday.

“This feature has now been removed from the connection. We do not know where it is or if it is automatically enabled. There is still no control by Truecaller to verify that they do not collect and publish data from users. minors… By omission, it appears that Truecaller acknowledged that this enhanced search functionality was a violation of regulation and consumer trust,” he said.

Unlike Truecaller, over-the-top platforms like WhatsApp don’t have a directory. You cannot search for people by name and number in the app.

“When WhatsApp is used on a phone, it syncs with your contacts. But if you call someone else, unless they are in your contact list, it will report them as not in your contact showing only a phone number or potentially spam,” Fraser John Perring, founder of Viceroy Research, told ET.

“But with Truecaller you can download it and if I called you and you didn’t have my number it would still show up as a name or how someone else who is commonly known to both parties registered number.This is unique as it takes your phone data as well as full phone book data and then places it into an address book accessible to others, which others give their consent or not. For minors, for vulnerable people in society, it is dangerous and an absolute violation of privacy.

Legal sources said a case was recently brought to the Supreme Court by a law student who argued that simply having the Truecaller software on his phone makes the individual’s full directory available. for the company without others giving their consent in the first place. This amounts to a breach of privilege, the student said.

Although the case was dismissed, lawyers and public policy watchers said this issue would inevitably come up.

Viceroy Research was founded in 2016 by Perring, a British short seller, with his Australian partners Aiden Lau and Gabriel Bernarde.

Perring and Viceroy have garnered considerable media interest due to their reporting on companies like Wirecard. Viceroy is also known to bet against companies like Tesla, Grenke, Sofina Group and local edtech unicorn Byju’s.

About Sandra A. Powell

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