• What information is protected by the Privacy Act?
• Do commercial references come within s.18N?
• What information can be disclosed by a credit provider when verifying application details?
• What may not be disclosed by a credit provider when verifying application details?
• Can a credit provider disclose name and address details to a third party for marketing purposes?
• Does the process of dishonouring a cheque involve a disclosure under s.18N?
• Can credit providers disclose information about interest earned by an individual to the individual's tax agent?

What information is protected by the Privacy Act?

Section 18N of the Privacy Act strictly limits the circumstances in which credit providers are permitted to disclose consumer credit information about individuals. Consumer credit information is broadly defined under s.18N(9) to include:

• a consumer credit report issued by a credit reporting agency or any information derived from such a report
• any information that has any bearing on an individual's credit worthiness, credit standing, credit history or credit capacity, except where all of the information is publicly available.

This Fact Sheet is a guide to what information falls within this definition in relation to a number of situations frequently faced by credit providers. As the examples show, when considering whether a particular disclosure is covered by s.18N, the context as well as the content of the disclosure needs to be taken into account.

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Do commercial references come within s.18N?

The commercial credit referencing system is largely unaffected by the Privacy Act. Information about commercial transactions is not covered by s.18N if it is disclosed in a commercial context, such as assessing an application for commercial credit. However, if commercial credit information is disclosed for the purpose of assessing an application for consumer credit, then the disclosure comes within s.18N as the information has a bearing on the individual's consumer credit worthiness.

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What information can be disclosed by a credit provider when verifying application details?

A credit provider is likely to disclose some information about the individual concerned when verifying details given on an application form, for example personal identifying details and information necessary to explain the context of the inquiry. Information which can be disclosed in this type of situation includes:

• identifying information, such as name and address
• the credit provider's name
• the fact that the individual has provided information in a credit application which the credit provider wishes to verify.

Very basic information of this type is not considered to be consumer credit information for the purposes of s.18N when disclosed in this context. However, it is recommended that credit providers inform applicants if employers, real estate agents or other referees may be contacted to verify information provided in the loan application. This ensures that applicants are aware of the credit provider's usual disclosure practices in relation to this basic type of information.

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What may not be disclosed by a credit provider when verifying application details?

Information which is regarded as consumer credit information for the purposes of s.18N and which therefore may not be disclosed when verifying loan application details includes:

• information about the credit application, such as amount or purpose of the loan, or repayment terms
• other information provided by the individual in the application.

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Can a credit provider disclose name and address details to a third party for marketing purposes?

The disclosure by a credit provider of name and address information, unaccompanied by any other information from which inferences can be drawn about the credit worthiness of the individuals concerned, is not generally regarded as consumer credit information for the purposes of s.18N. Accordingly, if a marketing proposal only involves this level of information, such disclosures will not be unlawful, although disclosures of this type may raise general privacy concerns and the credit provider may, in its discretion, choose not to disclose such information.

If the disclosure is accompanied by additional information from which inferences about individuals' credit worthiness can be drawn, then the disclosure may be unlawful pursuant to s.18N; for example, where a marketing firm wishes to have access to the names and addresses of individuals who have a certain credit limit for the purpose of marketing direct to those individuals.

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Does the process of dishonouring a cheque involve a disclosure under s.18N?

When a bank dishonours a cheque it is effectively indicating, in most cases, that the individual's account does not contain sufficient funds to cover the cheque. However, the Privacy Commissioner has taken the view that a disclosure in this context (of routine processing of cheque transactions and not of credit granting) does not indicate the individual's account balance or provide any information about the overall credit worthiness of the individual.

For these reasons, a bank is not considered to be in breach of the Privacy Act if it has dishonoured a cheque or indicates that the cheque should be presented again, as this action would not involve the disclosure of consumer credit information affected by s.18N.

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Can credit providers disclose information about interest earned by an individual to the individual's tax agent?

Banks and other financial institutions are not prevented by the Privacy Act from giving information about interest earned by a customer in response to enquiries from a tax agent preparing tax returns for the customer. While information about interest earned can give an insight into an individual's financial standing, and therefore credit worthiness, the disclosure is not regarded as coming under s.18N. The context of the enquiry is to ensure compliance with the customer's taxation obligations and the information is not being used to make an assessment of the individual's credit worthiness.

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