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Case Citation:

S v Debt Collector [2010] PrivCmrA 22

Subject Heading:

Listing of incorrect information about a payment default on an individual's consumer credit information file.

Law:

Section 18E and 18G(a) of Part IIIA of the Privacy Act 1988 (Cth) and paragraph 2.7 of the Credit Reporting Code of Conduct.

The following case was decided by the Privacy Commissioner prior to 1 November 2010. On 1 November 2010 all the powers of the Privacy Commissioner under the Privacy Act were conferred on the Australian Information Commissioner.

Facts:

An individual complained that a debt collector listed a payment default on their consumer credit information file with a credit reporting agency which did not relate to them. After unsuccessfully attempting to resolve the matter with the debt collector the complainant complained to the Commissioner.

Issues:

The credit reporting provisions at Part IIIA of the Privacy Act contain safeguards in relation to consumer credit reporting. 

If a payment in relation to consumer credit is outstanding, a credit provider may record a payment default on the individual's consumer credit file. A payment default is permitted if:

• the debt 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 last known address of the individual advising them of the overdue payment and requesting payment of the amount outstanding (paragraph 2.7 Credit Reporting Code of Conduct)
• the credit provider has notified the individual that it may provide information to a credit reporting agency (section 18E(8)(c)).

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

Outcome:

The Commissioner conducted preliminary inquiries into the complaint under section 42 of the Privacy Act.

In response to the inquiries, the debt collector stated that it had complied with its obligations under Part IIIA of the Privacy Act when initially listing the default and had reasonable grounds for believing that the information was correct. However, in investigating the matter the debt collector also found that:

• the default listing had been updated after the initial listing, significantly increasing the amount of the default
• the increased amount had been incorrectly referenced from an unrelated account.

The debt collector acknowledged it was in error and said it wished to resolve the matter. The complainant provided evidence indicating that the payment default had prevented them from attaining a significant loan and had led to the loss of a deposit on a major asset. The respondent agreed to compensate the individual and remove the default.

Satisfied that the respondent had adequately dealt with the matter, the Commissioner closed the matter under section 41(2)(a) of the Privacy Act.

Office of the Australian Information Commissioner
December 2010