Case Citation: 

W v Credit Provider [2006] PrivCmrA 22

Subject Heading:

Re-listing a serious credit infringement on a consumer credit information file.

Law:

Section 6, section 18E(1)(b)(x), section 18E(8)(a) and section 18F(2)(f) of the Privacy Act 1988 (Cth).

Facts:

The respondent, a credit provider, had listed a ''serious credit infringement'' on the complainant''s consumer credit information file in relation to a loan account. Some five years later, the respondent listed a second serious credit infringement on the complainant''s consumer credit information file in relation to the same debt. 

The credit reporting agency that held the complainant''s file removed the first listing in accordance with its then policy of record retention for a serious credit infringement which in this case was five years. 

Subsequent to the removal of the first listing, the complainant became aware of the second listing made by the respondent in relation to the debt. The complainant made a complaint to the respondent. Not satisfied with the outcome of the complaint the complainant then wrote to the Privacy Commissioner seeking a more satisfactory outcome claiming that the respondent had advised that the re-listing was not unlawful.

Issues:

Under section 18E(8)(a) of the Privacy Act credit providers are prohibited from listing information on a consumer credit information file which is not a ''permitted content'' (defined in section 18E(1)). Section 18E(1)(b)(x) permits the listing of a serious credit infringement on an individual''s consumer credit file where a credit provider has formed the opinion that the individual has committed a serious credit infringement. 

Section 6 outlines the circumstances whereby a serious credit infringement can be listed to include an act done by a person that involves: fraudulently obtaining or attempting to obtain credit; fraudulently evading or attempting to evade obligations in relation to credit; or actions that would lead a reasonable person to consider an intention on the part of the borrower not to comply with their obligations in relation to the credit account. 

The Commissioner takes the view that section 18E(1)(b)(x) allows a credit provider to only make one serious credit infringement listing in relation to the same infringement.  Section 18F(2)(f) provides that a credit reporting agency is entitled to retain a serious credit infringement listing for a maximum of seven years.

The complainant had in this case moved address and had not made any contact with the respondent to notify it of their change of address. The complainant failed to keep up with repayments on the loan and the respondent had interpreted the complainant''s actions as signalling an intention not to comply with their obligations in relation to the credit account. 

The fact that the complainant had committed a serious credit infringement was not disputed, rather it was the Commissioner''s concern that the respondent may have interfered with the privacy of the complainant by listing a serious credit infringement a second time. The Commissioner sought to establish whether the second listing complied with the credit reporting provisions in the Privacy Act. 

Outcome:

The Commissioner investigated the complaint under section 40(1).  The respondent advised that the complainant''s debt was one of a number it was no longer pursuing internally and had provided to an external debt collector for collection. An electronic flag, which the respondent stated would have appeared after the debt had been listed with the credit reporting agency, did not appear due to the debt being written off. 

The respondent argued that at the time of listing the second serious credit infringement the previous listing did not appear on the complainant''s consumer credit information file. However, evidence requested from the credit reporting agency in question disproved this assertion.

The respondent also defended the validity of the second listing by stating that it believed the second listing was permissible because even though it related to the same debt, it was listed for a different reason. The respondent argued that the first listing was made for the reason of the complainant showing an intention not to comply with their credit obligations, and that the second listing was due to possible fraud.

The Commissioner considered the respondent''s claims and held the view that in this case any subsequent refusal to fulfil credit obligations by the complainant after the first listing formed part of the same infringement. The respondent had not provided evidence that the second listing was made because it believed the complainant had committed fraud. Rather, the second listing was made because of an error in process. The Commissioner maintained the view that section 18E(1)(b)(x) allows credit providers to only make one serious credit infringement listing in relation to the same infringement. For these reasons the Commissioner found that the respondent had interfered with the complainant''s privacy by re-listing a serious credit infringement on their consumer credit information file.

The complainant claimed to have suffered humiliation and embarrassment as a result of the listing, stating they were working part-time because of the stress the respondent''s actions had caused them. The complainant sought a large amount of compensation to resolve the matter. The Commissioner requested that the complainant provide evidence of the link between the interference of their privacy and the loss they claimed to have suffered. The complainant did not respond to this request. 

The respondent advised the Commissioner that as a result of the complaint it had changed its procedure for listing serious credit infringements. The respondent stated it would retain a hard copy of the listing in individual records to reduce the risk of duplicate listings and assist in the creation of an audit history.  The respondent also stated that it had removed the serious credit infringement listing from the complainant''s consumer credit information file.

The Commissioner gave the complainant a further opportunity to respond and to substantiate their claim for compensation. The complainant did not respond. The Commissioner was satisfied that the actions taken by the respondent sufficiently addressed the complaint. The Commissioner closed the complaint under section 41(2)(a) of the Privacy Act on the basis that the respondent had adequately dealt with the matter.

OFFICE OF THE PRIVACY COMMISSIONER August 2006