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Determination under the Privacy Act 1988: 1992 No 2 s.18K(3)(b)

Concerning disclosures by the Tasmanian Collection Service of information included in a credit information file before 24 September 1991

• Concerning disclosures by the Tasmanian Collection Service of information included in a credit information file before 24 September 1991
• Reasons for determination
  • Background
  • Application by the Tasmanian Collection Service
  • Reasons for determination
  • Duration of the determination
  • Review of the determination

Concerning disclosures by the Tasmanian Collection Service of information included in a credit information file before 24 September 1991

Under s.18K(3)(b) of the Privacy Act 1988, I DETERMINE that:

1. The Tasmanian Collection Service may continue to disclose information contained in a credit information file which indicates that an individual has defaulted in making a payment in respect of commercial credit, being information which was included in the credit information file before 24 September 1991.

2. The Tasmanian Collection Service must cease disclosing information of this kind not later than five years from the date on which the information was first included in the credit information file.

3. This determination shall take effect on 25 February 1992, and shall lapse on 24 September 1996.

Dated 19 February 1992

Kevin Patrick O'Connor Privacy Commissioner

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Reasons for determination

Background

1. Section 18E of the Privacy Act lists all the types of information which a credit reporting agency is permitted to keep on a consumer credit information file. Section 18F requires that a credit reporting agency must delete from an individual's credit information file any personal information in respect of which the maximum permissible period for retaining that information has expired. Section 18K(2) prohibits a credit reporting agency from disclosing personal information contained in a credit information file, or information derived from the file, if the information is information it would be prohibited from including in the file under s.18E, or information it is required to delete from the file by s.18F.

2. The combined effect of the above provisions is to ensure that the information kept on file and disclosed by a credit reporting agency in the form of consumer credit reports is limited to that which is reasonably relevant to the individual's credit worthiness and hence relevant in the credit-related situations in which an agency is permitted under the Act to provide a report.

3. However, the Act also recognises that there may be occasions when the nature of past practice makes it impractical to bring into conformity with the requirements of s.18E information compiled by a credit reporting agency before the commencement of the Act. The Act gives the Privacy Commissioner a power under s.18K(3)(b) to determine that a type of information which is not permitted contents of a credit information file may be disclosed by a credit reporting agency without breaching the requirement of s.18K(2) if the information was collected before the commencement of the section, that is before 24 September 1991.

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Application by the Tasmanian Collection Service

4. The Tasmanian Collection Service, in effect the credit reporting agency for Tasmania, has applied for a determination under s.18K(3) to allow it to include in credit reports which it discloses information concerning defaults on commercial credit which was collected before 24 September 1991. The Tasmanian Collection Service has indicated that the only information it has retained about overdue payments recorded before 24 September 1991 is the date on which the overdue payment was recorded, the amount and the name of the credit provider. No record has been kept of whether a default related to commercial or consumer credit, and the information recorded does not provide a basis for making the distinction retrospectively.

5. Since 24 September 1991 the Tasmanian Collection Service has, as the Act requires, included only default information relating to consumer credit on consumer credit files. However, if it is to provide credit reports which contain information about loan defaults prior to that date, it is inevitable that the reports provided would contain information about commercial as well as consumer defaults, as the two are not able to be distinguished.

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Reasons for determination

6. The purpose of s.18K(3) is, I consider, to ensure that the activities of a reporting agency are not unduly hampered in future because past practices were organised in a way which has no or little similarity to the new arrangements.

7. I am satisfied that the manner in which the Tasmanian Collection Service has recorded default information in the past now precludes it from distinguishing consumer from commercial defaults. The only way in which information about commercial defaults could be excluded from consumer files and reports would be to exclude all pre-Act default information. To prevent a credit reporting agency from including default information in credit reports would greatly reduce the practical and commercial value of its reporting service.

8. The information included on individual consumer files about commercial overdue payments is limited to date, amount, and the name of the credit provider, and is also limited to commercial defaults that were listed against individuals rather than companies or other business entities.

9. The Tasmanian Collection Service has, since 24 September 1991, ceased recording commercial default information on consumer files, and as entries are automatically deleted after five years, existing information of this type will be progressively removed from consumer files between now and 24 September 1996. For these reasons, the extent of the commercial default information recorded before 24 September 1991 which will continue to be disclosed in consumer credit reports should be relatively slight. The Tasmanian Collection Service has undertaken to include on consumer credit files which contain information collected before 24 September 1991 a note that the file may contain some commercial default information collected before that date.

10. In the absence of any means of retrospectively separating consumer and commercial default listings, and recognising this as a transitional situation caused by the impact of the new legislation on old collection practices, I have determined that the Tasmanian Collection Service may disclose in credit reports, without breaching the Act, information about commercial defaults which was collected before 24 September 1991.

11. In order to ensure that consumers are aware of the fact that information of this nature (i.e. commercial default listings collected before 24 September 1991) is permitted to be disclosed by TCS, I have asked the TCS to include a reference to the content of this determination in information and general publications given by it to consumers, its members and consumer organisations. The TCS has also undertaken to delete such information as soon as it is brought to its attention, either through an individual's enquiry, or through internal file management activities. These actions should help to minimise the likelihood that information of this type may adversely affect the individual's credit worthiness.

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Duration of the determination

12. I have sought, in making this determination, to mirror the requirement of s.18F of the Act that information which is permitted to be included in an individual's credit information file will not be retained by credit reporting agencies beyond a specified period after it is recorded. In most cases, the Act allows for a maximum retention period of five years from the date on which the information is recorded.

13. The Tasmanian Collection Service has undertaken to automatically delete information which is the subject of this determination within five years of its collection. As determinations issued by me under s.18K(3) can only apply to information included in a credit information file before the commencement of the section, i.e. 24 September 1991, the maximum retention period of five years will commence from that date. Accordingly, this determination will cease to have effect on 24 September 1996.

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Review of the determination

14. While I am not required to publicly consult on determinations of this kind, I did seek the views of the Office of Consumer Affairs in Tasmania. That Office did not indicate any difficulties with the approach taken in this determination. I would, nonetheless, welcome views from any parties who are affected by this determination or other interested parties as to its appropriateness, and if necessary, will review the determination.

Kevin O'Connor Privacy Commissioner

February 1992

For further information please contact

Privacy Commissioner GPO Box 5218 Sydney NSW 1042

Privacy Hotline: 1300 363 992 Telephone: (02) 9284 9800 Fax: (02) 9284 9666

E-mail: privacy@privacy.gov.au

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