Case Citation: A v Credit Provider [2006] PrivCmrA 1

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

Law: Paragraph 2.7 of the Credit Reporting Code of Conduct

Facts: The complainant had a credit account with the credit provider. Following the dishonouring of several cheque payments dating back two years, the credit provider listed a payment default on the complainant's consumer credit information file held by a credit reporting agency.

The complainant claimed that advice received from the credit provider only ever indicated that the complainant was one monthly payment (30 days) overdue. A statement issued by the credit provider in the month immediately preceding the listing of the default, stated that the complainant was one monthly payment behind on the account.

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.

Credit providers are also bound by section 2.7 of the Credit Reporting Code of Conduct to send a written notice to the last known address of the individual advising them of the overdue payment and requesting payment of the amount outstanding.

It became apparent early in the investigation that the complainant was in fact 60 days overdue in the payment of their account. The complainant had received notification from the credit provider that the account was not up to date. However, the notification incorrectly indicated that the account was only 30 days in arrears. Although the credit provider claimed that it had also sent the complainant a default notice requesting payment of the full amount outstanding prior to the listing of the default, it could not provide any evidence of the alleged correspondence to the complainant. The complainant disputed that any such correspondence had been received. Further, there was no evidence that at any time in the history of the account the complainant received advice that would indicate that the account was 60 days overdue.

The issue for consideration, was whether the credit provider had given the complainant notification consistent with paragraph 2.7 of the Credit Reporting Code of Conduct, prior to the listing of the default.

Outcome: The Privacy Commissioner was of the opinion that the account statements received by the complainant did not clearly notify the complainant of the default status of the account, and that the information contained in the statements, in the circumstances, was misleading. The Commissioner formed the view that the credit provider had not satisfied paragraph 2.7 of the Credit Reporting Conduct. The credit provider agreed to remove the default listing from the individual's credit file.

The complainant claimed they had been refused credit by several credit providers, and had been unable to proceed with consolidation of their loans because of the default listing. As a result, the complainant requested compensation for loss and damage including humiliation. The Commissioner conciliated the matter, which concluded with a confidential settlement between the parties. The Commissioner then closed the complaint under section 41(2)(a) of the Act on the grounds that the credit provider had adequately dealt with the complaint.

OFFICE OF THE PRIVACY COMMISSIONER February 2006