Case Citation: H v Credit Provider [2003] PrivCmrA 6

Subject Heading: Disputed consumer credit default listing

Law: Sections 18E(1)(b)(vi)(A), 18E(1)(b)(vi)(B) and18E(8)(c)) of the Privacy Act 1988; paragraph 2.7 of the Credit Reporting Code of Conduct.

Details of the complaint

The complainant alleged that a credit provider had improperly reported to credit reporting agency that he was overdue in making payments on two accounts he held with the credit provider. Although he was aware that his accounts had been referred to a collection agency the complainant maintained that he had not received any notification that he was overdue. Nor did he believe that he was more than 60 days overdue in making payments on the accounts.

Prior to lodging his complaint with the Office of the Privacy Commissioner the complainant had repaid all amounts owing to the credit provider. He also claimed that it took approximately one and a half years for the credit provider to update his consumer credit file to reflect that the accounts had been paid in full.

Law

The Privacy Act permits a credit reporting agency to list an overdue account (a 'default') only if:

• the debt is at least 60 days overdue (s.18E(1)(b)(vi)(A)) and;
• the credit provider has taken steps to recover part or all of the amount outstanding (s.18E(1)(b)(vi)(B)); in particular, the credit provider must have sent a written notice to the last known address of the individual 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 information to a credit reporting agency (s.18E(8)(c)).

If a credit provider has reported an individual as overdue in relation to a debt and the individual subsequently pays the debt in full, the credit provider is required by s.18F(3) to inform the credit reporting agency that the individual is no longer overdue, and must do so as soon as practicable.

Investigation

The Privacy Commissioner wrote to credit provider asking it to provide evidence that it had satisfied the requirements of the Privacy Act and Credit Reporting Code of Conduct. The response enclosed the 'transaction history' for the complainant's accounts. On examination the transaction history verified that both accounts were more than 120 days overdue when the accounts were listed in default.

The credit provider also supplied the Office of the Privacy Commissioner with copies of letters it had sent to the complainant's last known residential address. These letters, dated three months prior to the date on which the accounts were reported as overdue, explained that the complainant had defaulted under his loan contract and failed to comply with the Default Notice. These letters informed the complainant that the accounts had been referred to recovery agents and noted that he might face legal proceedings and 'listing of the default with a Credit Reporting Bureau'. The complainant acknowledged that he had received this correspondence.

In addition, the credit provider supplied a copy of the complainant's original credit application form. This form, signed by the complainant, acknowledged that information about payments which became overdue by more than 60 days and for which collection action had commenced may be given to a credit reporting agency.

Contrary to the complainant's allegations, the complainant's consumer credit file indicated that the credit provider had notified the credit reporting agency that his accounts had been paid in full on the day the payments were received by the credit provider.

Outcome

For these reasons the Commissioner was satisfied that the credit provider had not breached the Privacy Act or the Credit Reporting Code of Conduct. The complaint file was closed under s.41(1)(a) of the Privacy Act on the basis that there had been no interference with the complainant's privacy.

OFFICE OF THE PRIVACY COMMISSIONER APRIL 2003