In the recent decision Taylor v Orcon Ltd, the Human Rights Review Tribunal ordered a telecommunications company, Orcon, to pay $25,000 in damages to Mr Taylor. This case sends a strong reminder to agencies to check the accuracy of personal information before using it.

Mr Taylor had a dispute with Orcon over a bill. Before the dispute was resolved, Orcon sent the debt to the collection agency, Baycorp. Baycorp then listed a payment default on Mr Taylor’s credit report with Veda Advantage.

The story has had quite a bit of media coverage, but none has yet covered the clear guidance the Human Rights Review Tribunal has given us about how to treat such cases in the future.

The Tribunal disagreed with the view we came to on the complaint and we’ve learned some important lessons.  

Mr Taylor complained to us, and we considered whether Orcon’s actions were a breach of principle 8 of the Act. Principle 8 says that agencies must take reasonable steps to make sure information it is uses is “accurate, up to date, complete, relevant and not misleading.”

We concluded Orcon had breached principle 8 by failing to take steps to ensure the accuracy of information relating to the Orcon default.

But we did not consider this breach caused Mr Taylor the harm he claimed (as required by section 66 of the Privacy Act). For an action to be an interference with privacy, there must be a breach of a privacy principle, which causes harm to the individual.

Mr Taylor claimed the Orcon default on his credit report caused him harm including:

• a finance company declined his application for a loan,
• he was unable to secure rental accommodation (because landlords do not want tenants with a negative credit rating)
• his family was significantly stressed and embarrassed.

We thought there were other contributing factors that caused Mr Taylor harm, not just Orcon’s actions. Accordingly, we concluded Orcon had not interfered with Mr Taylor’s privacy.

As part of the investigation, both the finance company and the property manager told us the Orcon default was not the sole or material reason for their decisions to decline Mr Taylor’s applications. Rather, those decisions were based on a combination of factors, of which the Orcon default was just one part.

The Tribunal agreed Orcon was in breach of principle 8 because they failed to take steps to determine whether a debt was in fact owed by Mr Taylor before the debt was referred to Baycorp.

But the Tribunal materially disagreed with the legal test we applied to determine whether the breach of principle 8 lead to interference with Mr Taylor’s privacy.

Causal connection

On the issue of ‘causal connection’ between the harm claimed by Mr Taylor and Orcon’s action in breaching principle 8, the Tribunal stated no clear causation standard has yet been established. But the purpose of the Act and the wording of the relevant provision should be considered. The causal connection standard set in section 66(1) of the Act requires evidence to show that harm has actually occurred or that it might occur.

The Tribunal disagreed with the causal connection standard we applied in our investigation, considering the threshold for harm in this case to be lower than the one we applied. In other words, it was enough that the Orcon default had “a real influence” or “more than minimal” influence upon Mr Taylor’s situation, and it did not have to be the sole or the material cause.

The Tribunal said it was sufficient for Mr Taylor to establish the Orcon’s default was a materially contributing cause leading to the complainant’s harm. Therefore the sole or the material cause assessment we followed was incorrect.

The Tribunal clearly articulated the need to consider the connection between the harm and the defendant’s action in the broad sense. It was sufficient the Orcon default was considered as a contributing factor by the finance company and the property manager when declining Mr Taylor’s applications. The fact that other adverse information was present on Mr Taylor’s credit file is irrelevant.

The Tribunal does not address the degree to which the Orcon default was a contributing factor to Mr Taylor’s harm, simply stating that in this case it was “more than minimal”, which was sufficient to establish an interference with Mr Taylor’s privacy. The decision is clear that the consequences on Mr Taylor were significant – specifically, the loss of a good credit rating and the fact that Mr Taylor and his family were caused “considerable anxiety and stress”.

While not every disputed debt would be in breach of principle 8, the Tribunal’s decision makes it clear agencies must take adequate steps to check the accuracy of the information before referring it to a debt collection agency.

The Tribunal is also clearly focused on ensuring adequate protection of an individual’s privacy by setting the causation standard at an attainable level.

Future implications

From now on, we will be applying the law in the way interpreted by the Tribunal. This means we will be getting tougher on respondents who have breached one of the principles.

Looking at the case from a slightly different point, it also has implications for credit reporting agencies that continue holding information about disputed debts, contrary to the Credit Reporting Privacy Code. We intend to take this up with credit reporting agencies and to focus on it in our 2016 annual review of those agencies’ reports on compliance with the Code.

IPP8 - accuracy, Human Rights Review Tribunal, Credit reporting, complaints