Determination under the Privacy Act 1988: 1997 No 1 s.11B(1)(b)(v)(B)

Concerning assignees

• Concerning assignees
• Reasons for determination
  • Background
  • Duration and further review

Concerning assignees

Under s.11B(1)(b)(v)(B) of the Privacy Act 1988, I DETERMINE that:

1. A corporation which acquires the rights of a credit provider with respect to the repayment of a loan (whether by assignment, subrogation or other means) shall, in relation to that loan, be regarded as the credit provider for the purposes of the Act.

2. A corporation deemed to be a credit provider by virtue of paragraph 1, above, shall, for the purposes of the Act, be regarded as the credit provider to whom application for the loan was made, or who provided the loan.

3. This determination relates to those corporations which are not already credit providers by virtue of paragraphs (a) or (b)(i) to (v) of s. 11B(1) of the Act.

4. This determination represents a continuation of Determination No 1 of 1995 which expires on 24 February 1997.

5. This determination shall take effect on 25 February 1997 and shall lapse, unless continued by a further determination of the Privacy Commissioner, on 24 February 2002.

Dated 4 February 1997

Nigel Waters Acting Privacy Commissioner

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Reasons for determination

Background

Determination 1997 No 1 represents a continuation, without amendment, of Determination No 1 of 1995.

In October 1996 consultations were undertaken with the Credit Reporting Consultative Group (CRCG), peak bodies in the industry and other organisations which expressed an interest in the last round of consultations regarding whether or not the original determination should be continued.

The relevant peak industry bodies strongly support a renewal of the determination. No objections were raised by the CRCG or other interested parties. In addition, in the experience of the Privacy Commissioner's office, no difficulties or problems have been encountered in the operation of the original determination.

Prior to the issue of the original determination, the Privacy Commissioner undertook extensive consultation, details of which appear in the reasons for that determination. The reasons for the original determination appear below.

In March 1993 the Privacy Commissioner received a request for a determination from a mortgage insurer for a determination under section 11B(1)(b)(v)(B) of the Act, to enable a corporation which acquires the rights of a credit provider with respect to the repayment of a loan to be regarded as a credit provider for the purposes of the Act. The request arose from concerns about the situation where a mortgage insurer takes assignment of a loan after the borrower defaults.

It was submitted that a mortgage insurer which takes assignment of a loan from a credit provider should thereafter be regarded as the credit provider in respect of that loan. This would entitle the mortgage insurer to obtain access to consumer credit reports and consumer credit information in relation to that loan, as if it had provided the loan in the first instance.

Following consultation, it was felt that the determination should not be limited to mortgage insurers but should have a general application to businesses which acquire the rights of credit providers. As such, it was decided to issue a determination that a corporation which acquires the rights of a credit provider with respect to the repayment of a loan (whether by assignment, subrogation or other means) shall, in relation to that loan, be regarded as a credit provider for the purposes of the Privacy Act.

With regard to notices given and consents obtained by the credit provider under the terms of the loan, it was envisaged that these would be taken to have been given or obtained by a business deemed to be a credit provider by virtue of the determination.

Under section 11B(1)(b)(v)(A) one of the conditions which must be satisfied before the Privacy Commissioner can determine a class of corporations to be credit providers is that those corporations carry on a business or undertaking involving the provision of loans. As such, the determination would not extend, for example, to debt collection agents who take assignment of loans, unless they happen to be engaged in the provision of loans.

Whilst this determination is directed to a certain class of corporations, the application of the determination is extended by virtue of section 11B(1)(c) to non-corporations which meet the criteria which apply to corporations under section 11B(1)(b).

As there have been no problems with the operation of Determination No 1 of 1995, and as the above reasons remain valid, I am of the view that it is appropriate to issue a further determination representing a continuation of this determination. A full text of the original determination and reasons is available from the Privacy Branch of the Human Rights and Equal Opportunity Commission.

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Duration and further review

As to the life of the determination, I am of the view that it should not be open-ended but should be the subject of review once there has been further experience of its operation. I consider that a period of five years commencing on 25 February 1997 is appropriate for this purpose. I have therefore included in the determination that it should lapse unless continued by a further determination on 24 February 2002. In the event that new privacy legislation is enacted in the meantime, this determination may be subject to review prior to this date.

Nigel Waters Acting Privacy Commissioner

4 February 1997

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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