pdf (100.15 KB)

Case Citation: 

Q v Credit Provider [2009] PrivCmrA 20

Subject Heading:  

Statute-barred debt listed on an individual's consumer credit information file

Law:

Paragraphs 2.5 and 2.8 of the Credit Reporting Code of Conduct, issued under section 18A of the Privacy Act 1988 (Cth)

Facts:

A credit provider listed a default on the complainant's consumer credit information file.  The complainant alleged that the debt was statute-barred at the time it was listed, and that when the credit provider became aware that the debt was statute-barred, it failed to notify the relevant credit reporting agency.  

Issues:

Paragraph 2.8 of the Credit Reporting Code of Conduct states that a credit provider must not give to a credit reporting agency information about an individual being overdue in making a payment where recovery of the debt by the credit provider is barred by the statute of limitations.

Paragraph 2.5 of the Credit Reporting Code of Conduct states that where a credit provider becomes aware that:

• a) it has given to a credit reporting agency personal information which was inaccurate at the time of giving the information, and which may have, or might, adversely affect the decision to grant credit; or
• b) it has given information of a type not permitted to be included in an individual's credit information file by a credit reporting agency

the credit provider must immediately advise the credit reporting agency of the inaccuracy or the existence of prohibited information.

A creditor may only bring an action for the recovery of a debt in accordance with the statute of limitations in the state or territory in which the debt arose.  In this instance, the debt arose in Victoria.  Under the Limitations Act 1958 (Vic), the limitation period on debts for goods and services is six years after the debt became due. 

Outcome:

The Privacy Commissioner investigated the matter under section 40(1) of the Privacy Act.

On investigating the complaint, the Commissioner confirmed that the complainant's debt was statute barred two years before it had been listed.  The Commissioner therefore found that the credit provider had not complied with paragraph 2.8 of the Credit Reporting Code of Conduct.

The Commissioner also established that, after listing the debt, the credit provider had upgraded its computer system.  The upgrade allowed statute-barred debts to be identified before they were listed.  The credit provider subsequently identified the complainant's debt as statute-barred, and sent a notice to the credit reporting agency.  However, the notification did not indicate that the listing was inaccurate, and did not request that the listing be removed.  During a further system upgrade, the credit provider again identified the complainant's debt as statute-barred, however it did not notify the credit reporting agency.

On that basis, the Commissioner found that the credit provider had failed to meet the requirements of paragraph 2.5 of the Credit Reporting Code of Conduct.

In resolution of the complaint, the credit provider apologised to the complainant, removed the debt from the complainant's credit file, revised its process for identifying statute-barred debts and trained its staff on managing statute-barred debts.

The Commissioner closed the investigation under section 41(2)(a) of the Privacy Act, on the grounds that the credit provider had adequately dealt with the complaint.

OFFICE OF THE PRIVACY COMMISSIONER

December 2009