Case Citation: B v Credit Provider [2005] PrivCmrA 2

Subject Heading: Statute barred debt listed on consumer credit information file.

Law:Section 18A of the Privacy Act 1988 (Cth), relating to credit information files and credit reports, and section 2.8 of the Credit Reporting Code of Conduct relating to reporting overdue payments.

Facts: The complainant received a demand in January 2003 for payment of outstanding telephone service charges covering a 12 month period up to September 1996. The letter from the respondent, to whom the debt had been assigned, indicated that if payment was not made within five days a payment default in the amount of the debt would be listed on the complainant's consumer credit information file, held by a credit reporting agency. The complainant claimed an invoice had been paid in April 1996 and disputed owing further amounts.

In March 2003 the respondent listed a payment default in the amount of the debt on the complainant's consumer credit information file, held by a credit reporting agency. Preliminary enquiries into the matter were made by the Commissioner under section 42 of the Act.

Issues: A creditor may only bring action for the recovery of debts in accordance with the statute of limitations in the State or Territory in which the debt arose. The statute of limitations on debts for goods and services is generally six years. This means that a court will not hear an action for payment where a debt is outstanding for more than six years. Legal action on such debts is therefore statute barred.

Section 2.8 of the Credit Reporting Code of Conduct, issued in accordance with section 18A of the Privacy Act 1988 (Cth), prohibits the listing of statute barred debts with a credit reporting agency. Section 2.8 of the Credit Reporting Code of Conduct provides that a credit provider must not give to a credit reporting agency information about an individual being overdue in making a payment where recovery of the debt by the credit provider is barred by the statute of limitations.

The complainant advised the Commissioner that they had paid an invoice in April 1996 and disputed owing further amounts. The respondent had listed the amount of the debt as an overdue amount on the complainant's consumer credit information file in March 2003, which was more than six years after the date the debt was incurred.

Outcome: The respondent was advised by the credit reporting agency about the prohibition against listing statute barred debts, and the payment default listing was removed from the complainant's consumer credit information file. The Commissioner declined to investigate the complaint further on the basis that the matter had been adequately dealt with in accordance with section 41(2)(a) of the Privacy Act . Because of the respondent's activities, its access to the credit reporting agency's database was suspended whilst the credit reporting agency investigated any other listings the respondent might have listed inappropriately.

OFFICE OF THE PRIVACY COMMISSIONER FEBRUARY 2005