Major credit reporting changes proposed: Public submissions invited
EMBARGOED UNTIL 12.01am, 17 May 2011
All attachments embargoed until 12.01am, 17 May 2011
Privacy Commissioner Marie Shroff today publicly notified proposed amendments to the law that will introduce a more comprehensive style of credit reporting that is closer to US practice, and asked for submissions on the proposed changes. The changes will also enable victims of identity fraud to 'freeze' their credit records.
The amendment marks the establishment of a more comprehensive credit reporting system for New Zealand. 'At the moment information gets added to credit reports at the time individuals seek credit and when they default on their obligations,' Marie Shroff said. 'This amendment will mean that there will be continual reporting on an individual's repayments whenever they hold credit.'
The proposed amendment builds on changes made in December 2010 that allowed credit reporters to report the precise amounts of credit granted to individuals. The new amendment goes further by allowing on-going reporting of repayment history - such as whether monthly credit card, mortgage or utility payments are made on time.
The package of changes will give credit providers new tools to assess borrowers' creditworthiness. It will assist banks and finance companies to make robust credit decisions in the current environment that demands quick decisions on credit applications. Credit reporters have argued that these changes will assist lenders to behave responsibly and allow them to offer competitive and accessible credit to consumers.
The Commissioner noted that the proposed changes undoubtedly came at some cost to personal privacy. 'There is no doubt that this would be a more intrusive regime, but I have tried to ensure that there will be benefits to individuals and the community, as well as to business interests', Ms Shroff said.
The proposed amendment will introduce 'credit freezing' for people who are victims of identity fraud. 'Identity fraud is a serious issue and this is a practical response for individuals. I have proposed a way of limiting the risk of someone taking out credit in another person's name,' Marie Shroff said. The change will enable consumers to have their credit report suppressed if they are the victim of fraud.
'These changes are not yet fixed and I would like to hear from the public, as well as industry. I'm very interested in views on whether the changes are worthwhile, whether the balance struck is the right one and if the protections and safeguards will be sufficient,' Marie Shroff said.
The new amendment comes after a lengthy review process and is consistent with proposals for law change in Australia.
Comments on proposed Amendment No 5 to the Credit Reporting Privacy Code are invited by Friday, 24 June. The proposed amendment and an information paper are available at http://privacy.org.nz/codes-consultation/.
For further information contact: Annabel Fordham 021 509 735 or 04 474 7590.
Notes for editors: The Credit Reporting Privacy Code 2004 is a code of practice issued by the Privacy Commissioner under the Privacy Act 1993. It controls the practices of credit reporting agencies. Amongst other things, the code limits the information that may be disclosed by credit reporters; who may access credit reporting databases, and provides retention periods for credit information held by credit reporters. The code is available at http://privacy.org.nz/credit-reporting-privacy-code/.