19 September 2012
Credit reporting changes proposed: Public submissions invited
Privacy Commissioner Marie Shroff has reaffirmed in planned amendments to a privacy code that lenders must tell existing customers before they share their "positive" credit information. This includes what credit people have and whether they meet their monthly repayments. Lenders can only share this positive information with the consent of their customers.
Ms Shroff has outlined several proposed amendments to the Credit Reporting Privacy Code 2004.
"If a lender wants to begin sharing positive information about existing customers, they must inform their customers of the data they intend to share", Ms Shroff said. "It's crucial, in order to maintain customer trust, that borrowers are told of significant changes to the way their personal information is disclosed."
"Several major lenders have already signalled their intention to share positive information with credit reporters, but many other lenders are yet to make a clear move," Ms Shroff said.
"The transition to a more comprehensive credit reporting system is going to take some time," said Ms Shroff. "My message to lenders is, before you start to share information about your existing customers' credit accounts and repayment patterns, you must put them in the picture."
"For that reason, I propose to continue for four years the requirement that lenders notify their customers about positive credit reporting. This will ensure that customers are informed during the transition," Ms Shroff said.
The Commissioner also proposes to make changes to the credit code to permit lenders to use the credit reporting system to meet their identity verification requirements under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.
From 30 June 2013, financial institutions such as banks, finance and credit card companies will be required to verify their customers' identities, to make sure they are trading with real people who have a known history.
Under the proposed changes, financial institutions will be able to run new customers through the credit reporting system to verify their identity.
Credit reporters will not be permitted to add these enquiries by lenders into the customer's credit score.
Submissions on the proposed amendment to the Credit Reporting Privacy Code are invited by 31 October 2012. View the proposed amendment and information paper outlining all the changes.
For further information contact: Cathy Henry 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. View the code.