Credit reporting practices update

The Office of the Australian Information Commissioner (OAIC) Annual Report for 2014–15 notes that in 2014–15, credit reporting related issues made up 24.3% of the total number of complaints received.

Part IIIA of the Privacy Act and the Privacy Regulations 2013 restricts the types of credit information that may be disclosed to Credit Reporting Bodies (CRBs), the circumstances in which that information may be disclosed by a CRB to Credit Providers (CPs) and affected information recipients and their handling of that disclosed information.

The OAIC’s annual report says that credit related complaints are often resolved through conciliation by updating credit information, removing incorrectly listed defaults or debts or unlinking credit files that have been incorrectly linked. In some cases the resolution may include financial compensation where a complainant has incurred financial disadvantage.

FOS and CIO are approved EDR schemes for privacy disputes.

Under section 6Q of the Privacy Act preconditions to the disclosure of default information include: the consumer credit payment must be overdue by at least 60 days, the overdue amount must not be less than $150 and the CP must have met the notice obligations specified in Part IIIA, the Regulations and the Privacy (Credit Reporting) Code.

Additionally a listing must not be made if there is any unresolved hardship request or current dispute with an EDR Scheme.

Where a credit provider discloses default information in relation to consumer credit to a CRB:

(a) the amount specified as overdue must not include an amount of an overdue payment that was previously disclosed as default information in relation to that consumer credit;

(b) the amount specified as overdue may be subsequently updated to reflect the accrual of interest, fees and other amounts that are owing as a result of the overdue payment, other than the acceleration of the entire liability for the consumer credit;

(c) where the amount of an overdue payment is the result of the acceleration of the entire liability for the consumer credit and includes an amount previously disclosed as default information, the CP must request the CRB to destroy the previously disclosed default information;

(d) where the CRB is requested under (c) to destroy default information, the CRB must destroy the default information;

(e) where the amount originally disclosed is updated under (b), the original date of disclosure of default information remains the date from which the relevant retention period runs.

In FOS’s latest systemic issues update FOS discusses errors in credit listings: a FSP had listed accelerated amounts owing incorrectly without serving the appropriate notice to customers required under section 88 of the National Credit Code.

CIO said in its annual report that credit reporting complaints have climbed to 24% of all complaints received.

It also investigated systemic issues relating to the listing of incorrect information on consumer credit reports, such as:
• listing a serious credit infringement when only a payment default should have been listed, or
• listing the entire amount of a consumer’s loan as being in default, rather than just the overdue payments.

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