Case Citation:

R v Finance Company [2008] PrivCmrA 18

Subject Heading:

Improper listing of a payment default on an individual's consumer credit information file

Law:

Section 18E in Part IIIA of the Privacy Act 1988 (Cth). Paragraph 2.7 of the Credit Reporting Code of Conduct

Facts:

A finance company listed a payment default on the complainant's credit information file held by a credit reporting agency. The complainant alleged that the finance company as a credit provider did not send written notice advising the complainant their account was overdue before listing the payment default.

The complainant claimed that the finance company sent an account statement only after it had listed the overdue payment as a default on the complainant's credit information file. Further, the complainant claimed that they had paid the amount in full five days after receiving this statement. The complainant also stated that the finance company should take into consideration the complainant's personal circumstances that they had been recovering from surgery before the default listing was made.

Issues:

Section 18E(8)(a) of the Act restricts information that can be disclosed by a credit provider to a credit reporting agency. Credit providers can only list a payment default on an individual's consumer credit information file where payment for the account is at least 60 days overdue.

More specifically, where a payment in relation to consumer credit is outstanding and remains unpaid, a credit reporting agency may record a 'default listing' on the individual's credit report. The Privacy Act permits a credit reporting agency to list an overdue payment if:

• the payment is at least 60 days overdue (section 18E(1)(b)(vi));
• the credit provider has taken steps to recover part or all of the amount outstanding (section 18E(1)(b)(vi));
  • in particular, the credit provider must have sent a written notice to the individual's last known address, advising them of the overdue payment and requesting payment of the amount outstanding (paragraph 2.7 of the Credit Reporting Code of Conduct); and
• the credit provider has notified the individual that it may provide their information to a credit reporting agency (section 18E(8)(c)).

Section 18E(8)(b) of the Privacy Act prohibits a credit provider from reporting information to a credit reporting agency, unless the credit provider has reasonable grounds to believe that the information is correct.

Outcome:

The Privacy Commissioner treated the complainant's letter as a complaint under section 36 of the Privacy Act and conducted preliminary enquiries into their allegations under section 42 of the Privacy Act.

The finance company provided the Privacy Commissioner with copies of several account statements (written notices) it had sent to the complainant over a five month period, prior to the default listing being made. The written notices advised the complainant of their outstanding payment and requested payment for the amount overdue.

The finance company also provided the Commissioner with a copy of the default notice it sent to the complainant two months before the default listing was made. This written notice advised the complainant that the finance company would list details of the outstanding amount with credit reporting agencies if payment was not made.

As the finance company was able to provide evidence to indicate that the listing was made on the complainant's credit information file in accordance with section 18E(1) of the Privacy Act, the Commissioner declined to investigate the matter under section 41(1)(a) of the Privacy Act.

OFFICE OF THE PRIVACY COMMISSIONER

June 2008