Case Citation:
 

E v Advertiser [2009] PrivCmrA 5
 

Subject Heading:

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

Law:

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

Facts:

The complainant had a number of items advertised for sale in a local newspaper and in an online advertisement.
  Those items were left over from a business venture that the complainant had since ceased.
  The respondent organisation, an advertiser, contacted the complainant offering to readvertise those goods.
  The complainant claimed that they did not accept the advertiser's offer.

Several weeks later the complainant received a letter from the advertiser which they did not open.
  The complainant then received another letter from the advertiser and found that it contained an invoice for the publication of the complainant's advertisement.
  The complainant maintained that they had not accepted the advertiser's offer to readvertise the goods and refused to make any payment.
  The advertiser later contacted a credit reporting agency to have the complainant's failure pay the invoice recorded on their consumer credit file.

The complainant claimed that the default listing was invalid as they had not engaged the services of the advertiser.

Issues:

Section 6(1) of the Privacy Act defines ''credit' as a loan that is intended to be used wholly or primarily for domestic, family or household purposes.
  This is considered consumer credit and is regulated by Part IIIA of the Privacy Act.
  Credit sought or obtained for any other purpose is considered commercial credit and is not regulated by Part IIIA of the Privacy Act.

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

If 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)).

Additionally, according to section 18G of the Privacy Act, a credit provider or credit reporting agency in possession or control of a credit report, must take reasonable steps to ensure that personal information contained in the file or report is accurate, up-to-date, complete and not misleading.

Outcome:

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

The Commissioner first considered whether any credit extended to the complainant was intended for commercial or consumer purposes.

The goods for sale were once part of a business run by the complainant and could be considered commercial in nature.
  However, the complainant's business had ceased and the goods had become part of the complainant's personal or household belongings.
  Additionally, the subject of any agreement between the complainant and advertiser was for the publication of an advertisement for those goods, rather than the goods themselves.

In the circumstances, the Commissioner considered that any credit provided to the complainant was for personal or household purposes.
 

This meant that the advertiser would be required to comply with the consumer credit reporting provisions in Part IIIA of the Privacy Act.

The Commissioner found that the advertiser had phoned the complainant offering to readvertise the goods for sale and offered the complainant the opportunity to pay for the advertisement immediately or to be invoiced at a later date.

Though the complainant denied agreeing to the advertisement, the advertiser claimed that the complainant accepted its offer and opted to receive an invoice for payment.
  The advertiser claimed that it collected the complainant's personal information directly from them during that phone call.
  It stated that without collecting that information from the complainant, the invoice could not have been issued nor would the advertisement have been published.

The Commissioner considered all of the information available and formed the view that the complainant had agreed to the service provided by the advertiser, and had elected to be invoiced for payment at a later date.

The account was established and a full invoice posted to the complainant's address.
  The complainant did not open this letter nor pay the account.
  A second invoice was posted to the complainant but the account remained unpaid.
  The advertiser then recorded the default on the complainant's consumer credit information file.

The Commissioner was satisfied that the parties had engaged in a valid credit agreement for the advertisement of the complainant's goods.
  The Commissioner was also satisfied that the account was more than 60 days overdue at the time of the listing, that the advertiser had attempted to recover the amount owing by writing to the complainant, and had notified the complainant that if unpaid, the
  account would be recorded on the complainant's consumer credit file.

The Commissioner closed the matter under section 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

May 2009