Case Citation:
 

D v Finance Company [2009] PrivCmrA 4
 

Subject Heading:

Improper listing of a payment default on an individual's consumer credit information file

Law:

Section 18E in Part IIIA of the Privacy Act 1988 (Cth) and Paragraph 2.7 of the Credit Reporting Code of Conduct

Facts:

The complainant entered into a loan agreement with a finance company for the purchase of a motor vehicle.
  The complainant repaid the loan by regular direct debit.

Before the loan was repaid in full the direct debit arrangement ceased.
  The complainant was unaware that the account had fallen into arrears until they found a default listed on their consumer credit file.

The complainant claimed that they had not received any notification from the finance company of the amount outstanding or of the finance company's intention to list the default on their consumer credit file.

Issues:

Section 18E(8)(a) of the Privacy Act restricts information that can be disclosed by a credit provider to a credit reporting agency.

Where a payment in relation to consumer credit is outstanding and remains unpaid, a credit reporting agency may record a ''default listing' on the individual's credit report.
  The Privacy Act permits a credit reporting agency to list an overdue payment if:

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

Outcome:

The Privacy Commissioner commenced an investigation of the matter under section 40(1) of the Privacy
 Act.
 

The Commissioner found that when the complainant's account fell into arrears the finance company had attempted to contact them by writing to them at their last known address.

However, during the investigation it became apparent that the address used by the finance company was incomplete.
  The finance company had omitted enough information from the address so that it was unlikely that the complainant could have received the letters advising them the account was in arrears and that the default would be listed on their credit report.

The Commissioner exercised the powers of conciliation under section 27(1)(ab) of the Privacy Act to attempt to resolve the matter.

The complainant indicated that they would be satisfied with the payment default listing being removed from their consumer credit file.
  The finance company agreed and promptly contacted the credit reporting agency to ask that the listing be deleted.

The credit reporting agency removed the payment default listing.
  Satisfied that the matter had been adequately dealt with by the finance company, the Privacy Commissioner closed the matter under section 41(2)(a) of the Privacy Act.

OFFICE OF THE PRIVACY COMMISSIONER

May 2009