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Case Citation: 

S v Debt Collection Agency [2009] PrivCmrA 22

Subject Heading:  

Listing of a provable debt on a credit information file

Law:

National Privacy Principle 3 in Schedule 3 of the Privacy Act 1988 (Cth), section 18G(a) and 18E(8)(b) in Part IIIA of the Privacy Act 1988 (Cth), and paragraph 2.5 of the Credit Reporting Code of Conduct

Facts:

A debt collection agency listed a debt on the complainant's consumer credit information file.  The complainant claimed the debt was a ‘provable debt' on their bankruptcy Statement of Affairs, and therefore should not have been disclosed to the credit reporting agency.  The complainant also alleged that the debt collection agency failed to advise the credit reporting agency on becoming aware that the debt was incorrectly listed.

Issues:

NPP 3 states that an organisation must take reasonable steps to make sure that the personal information it collects, uses or discloses is accurate, complete and up-to-date.

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

Section 18E(8)(b) of the Privacy Act prohibits a credit provider from reporting information to a credit reporting agency unless the credit provider has reasonable grounds for believing that the information is correct.

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.

Outcome:

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

The Commissioner established that the debt collection agency had bought the debt from a credit provider in good faith under a ‘collectable debts' agreement.  As a result of this agreement, the Commissioner considered that the debt collection agency was entitled to consider that the debt was collectible.

Before providing a debtor's details to a credit reporting agency, the debt collector had sent a written Notice of Assignment to the debtor.  The Notice of Assignment stated that the debt had been assigned to the debt collection agency, that payment was requested, and that the debtor's details may be passed on to a credit reporting agency. 

In this case, the debtor did not dispute the debt until after it had been listed on the credit file.  However, the debt collection agency advised the Commissioner that if the debtor had disputed their debt, the debt collection agency's normal process is to verify the debt with the original credit provider before passing the debtor's details to a credit reporting agency.

The Commissioner was satisfied that the above process constituted reasonable steps under both NPP 3 and section 18(G)(a).

Based on the above steps, the Commissioner was also satisfied that the debt collection agency had reasonable grounds for considering the information it passed to the credit reporting agency was correct for the purposes of section 18E(8)(b) of the Privacy Act.

Finally, the Commissioner confirmed that when the debt collection agency became aware the listing was incorrect, it contacted the credit reporting agency on the same day and requested that the listing be removed from the complainant's credit file.  The Commissioner found that by doing so, the debt collection agency had met the requirements of paragraph 2.5 of the Credit Reporting Code of Conduct.

The Commissioner closed the investigation under section 41(1)(a) of the Privacy Act, on the grounds that the debt collection agency had not breached the Privacy Act.

OFFICE OF THE PRIVACY COMMISSIONER

December 2009