Case Citation: C v Service Provider [2004] PrivCmrA 17

Subject Heading: Payment default listed on consumer credit information file when the individual had not applied for credit

Law: Section 6, section 18E (1)(b)(vi), and 18E(8)(c) of the Privacy Act 1988 (Cth)

Facts: The complainant was stopped by the police, was required to attend hospital for a blood test and advised that he could not drive his car. He was given the choice of being driven to hospital in the police vehicle or using an ambulance. He chose the ambulance.

The complainant did not receive any information about payment arrangements prior to using the ambulance service. Later, the complainant received an invoice for the cost of the ambulance journey which allowed 30 days to pay. He did not pay the account. The ambulance service attempted to collect the debt and as it was not paid, listed a payment default on the individual's consumer credit information file.

Issues:Section 6 and section 18E(1)(b)(vi) Section 6 defines credit as 'a loan sought or obtained by the individual from a credit provider in the course of the credit provider carrying on a business or undertaking as a credit provider…'. A loan is defined as a 'contract, arrangement or understanding under which a person is permitted to defer payment of a debt, or to incur a debt and defer its payment'. Section 18E specifies the permitted contents of a credit information file; in particular section 8E(1)(b)(vi) permits a credit reporting agency to include information in an individual's credit information file that shows the individual has been provided with credit by a credit provider and that the individual is at least 60 days overdue in making a payment and the credit provider has taken steps to recover the whole or part of the amount of credit (including any amounts of interest) outstanding.

In this matter, while the complainant appeared to owe money as a debt for the ambulance journey, the investigation focussed first on whether there was a .…'contract, arrangement or understanding'…. between the complainant and the ambulance service at the time he used the ambulance service such that he was aware that he was entering into a contract, arrangement or understanding that he was applying for credit. The ambulance service argued that the invoice provided to the complainant, after he had used the service, constituted 'a contract, arrangement or understanding' which fulfils the requirements of the definition of a loan under the Act.

The Commissioner's view was that, while the initial invoice allowed the deferral of payment, in full, for 30 days, it did not establish that the service extended credit to the complainant. The Commissioner also considered that the action of advising an individual at a later date that the first invoice constituted a contract (for a service previously provided) could not be relied on to establish that a contract existed at the time of the provision of service, which in this case was the ambulance journey. The Commissioner took the view that there was no contract, arrangement or understanding between the service provider and the complainant that he was applying for credit at the time he used the ambulance service and that listing the payment default was a breach of section 18E(1)(b)(vi).

Section 18E(8)(c) Section 18E(8)(c) provides that a credit provider must not give a credit reporting agency personal information relating to an individual if it did not, at the time of, or before, acquiring the information advise the individual that the information might be disclosed to a credit reporting agency.

In this instance, the ambulance service relied on the fact that it had advised the complainant, in the course of its payment collection activities, that it would list a payment default with a credit reporting agency if the debt was not paid.

The Commissioner's view was that the ambulance service acquired personal information at the point the complainant used the ambulance service. However, the complainant was only advised about the possibility of a payment default listing after he had failed to pay the invoice within the 30 day grace period for payment. The Commissioner held the view that the advice did not establish that the service had extended credit to the complainant.

Outcome: The Commissioner concluded that the arrangement in this case did not constitute a loan under the Act (and therefore that the payment default listing could not be disclosed to a credit reporting agency) as it did not meet the meaning of credit as found in section 18(1)(b)(vi). In addition the purported payment default listing did not meet the requirements of section 18E(8)(c).

The ambulance service accepted these views and removed the default listing from the complainant's credit report. It also advised that it would cease the practice of listing payment defaults in relation to its customers.

OFFICE OF THE PRIVACY COMMISSIONER December 2004