Case Citation: K v Credit Provider [2005] PrivCmrA 8

Subject Heading: Improper listing of a serious credit infringement on an individual's consumer credit information file.

Law: Sections 18E(1)(b)(x), 18E(8)(a) and 41(2)(a) of the Privacy Act 1988 (Cth)

Facts: The complainant had a contractual agreement with the credit provider for the lease of a vehicle. When the lease ended, the complainant was given the option of purchasing the vehicle by payment of the residual amount owed or returning the vehicle to the credit provider.

Following non-payment, a notice was sent to the complainant providing a seven day deadline for payment of the full amount owed or the return of the vehicle. The complainant applied to refinance the residual amount but the application was refused and a further deadline was set.

The deadline again passed without payment or return of the vehicle. The credit provider contacted the complainant by phone and the complainant advised that they would pay the full amount owed in four days time. The credit provider was dissatisfied with this and demanded return of the vehicle which the complainant refused to do.

The credit provider also visited the complainant's recorded place of residence. The credit provider claimed that an individual at that address said that the complainant no longer lived there.

The credit provider then listed the amount owed on the complainant's consumer credit information file as a 'clearout' (an instance of a serious credit infringement). The listing was recorded fifty-four days after the date the lease agreement concluded and the debt was originally due. The complainant paid the debt in full eight days after the clearout was recorded.

Issues: Section 18E(8)(a) of the Act states that:

A credit provider must not give to a credit reporting agency personal information relating to an individual if:

a) a credit reporting agency is prohibited, under subsection (1), from including the information in the individual's credit information file;

Section 18E(1)(b)(x) of the Act allows a credit reporting agency to record a serious credit infringement (such as a clearout) on an individual's consumer credit information file. The definition of a serious credit infringement in section 6(1) of the Privacy Act includes:

c) an act done by a person... that a reasonable person would consider indicates an intention, on the part of the first-mentioned person, no longer to comply with the first-mentioned person's obligations in relation to credit.

The explanatory notes to the Credit Reporting Code of Conduct provide guidance about what might indicate such an intention on behalf of the debtor; for example, where the individual has stopped making payments under the credit agreement and the credit provider has made reasonable efforts to contact the individual but has been unsuccessful.

In this case, the complainant advised that their contact details had not changed since entering the lease agreement with the credit provider. Though this information is contrary to the information provided by the credit provider, it is evident that the credit provider and complainant were in phone contact leading up to the listing of the clearout. Further, the credit provider conceded that on the day the clearout was listed, the complainant expressed an intention to pay the amount owing in four days time. Full payment was received eight days later.

Outcome: The Commissioner formed the opinion that the actions of the complainant in this case would not indicate to a 'reasonable person' an intention to no longer comply with their obligations in relation to the debt owed and did not otherwise satisfy the definition of 'serious credit infringement' under the Privacy Act.

The complainant sought to have the default listing removed, to which the credit provider agreed.

The Commissioner formed the view that whilst it appeared that the clearout was listed by the credit provider on the complainant's consumer credit information file in breach of section 18E(8)(a) of the Privacy Act, the credit provider had since taken appropriate steps to deal with the matter by removing the listing. Accordingly, the Commissioner closed the complaint under section 41(2)(a) on the grounds that the credit provider had adequately dealt with the complaint.

OFFICE OF THE PRIVACY COMMISSIONERJune 2005