Dutch bank ING has stepped back from plans to serve ads to its customers based on their banking habits.

In an open letter to all ING customers published on Monday, the company's chairman Nick Jue announced that it had put its plans for the advertising pilot project on hold.

The trial, announced by the bank last week , would have allowed companies to push targeted advertising to its customers based on their payment history. Although ING's director of private banking Hans Hagenaars claimed that the plans "are a logical step towards the future of targeted advertising" both the bank's customers and consumer organisations raised concerns about the proposed pilot, fearing a massive violation of privacy.

Dutch consumer organisation Consumentenbond even went so far as to say that: "there is no law permitting the sale of any data that's yours".

While the bank had initially said the scheme would benefit consumers, it used the open letter to its customers and reassure them that the pilot will not be launched anytime soon.

"We have not been clear enough about the sensitive topic of customer data, causing an avalanche of worried response from our customers. These responses clearly demonstrate that there are a lot of questions and concerns about the protection of customer data, for which I sincerely apologise," Jue says in the open letter.

ING is not and has never been planning on selling individual customer and transaction data and that the pilot was intended to help customers better manage their personal finances by helping them save money through customised offers, Jue says.

The letter concludes with the promise that the pilot has been put on hold: "Of course we listen extremely well to all the signals we receive. Therefore, we will enter into consultation with our customers about how ING can best be of service in saving on daily expenses. We will engage in conversation with customers, regulators, privacy groups and consumer organisations to determine how and whether we will proceed with this. Whether we will actually launch a pilot with a select group of interested customers, when, and under what conditions, will be determined after these conversations. Since we want to take due time to talk to all parties, and our customers in particular, the pilot will be put on hold for now."

Victory for privacy

Following the publication of the open letter, Consumentenbond posted a response on its website, celebrating what it sees as a victory for privacy: "The news that ING has decided to refrain from using its customers' information for third-party offers for the time being is very good news."

Bart Combée, director of Consumentenbond, says: "The consequences of this plan have not been given enough thought and it has led to mass confusion, astonishment and indignation. That is extremely bad for the relationship of trust between consumers and the banks, which offers much room for improvement as it is."

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