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The debt collection agency, Law Debt Collection Ltd, failed to check information about a disputed debt before it referred the information to a credit reporter, says Privacy Commissioner John Edwards.

Mr Edwards says, as a result of Law Debt’s actions, the man who disputed the debt, had the default listed against his credit record and he was unable to renegotiate his mortgage with his bank.

The man’s complaint to the Privacy Commissioner raised issues under principle 8 of the Privacy Act. Principle 8 says an agency that holds personal information shall not use that information without taking reasonable steps to ensure the information is accurate, up to date, complete, relevant, and not misleading.

The Office of the Privacy Commissioner found Law Debt breached principle 8 because it did not take reasonable steps to check the information.

“Without taking reasonable steps to check the accuracy of the information, Law Debt referred the matter to a credit reporting agency. Law Debt advised the credit reporter that the debt was not disputed, and that was misleading” Mr Edwards said.

“The complainant also explained to us that at the time, his family circumstances were stressful and Law Debt’s actions had caused him additional stress and anxiety.

“I concluded Law Debt’s attitude to the breach, including its failure to respond to our letters, warranted referring the complaint to the Director of Human Rights Proceedings. It also contributed to our decision to publicly identify Law Debt in accordance with our Office’s naming policy.”

Mr Edwards says agencies need to take reasonable steps to check the accuracy of personal information before using it, especially if the consequences to the individual are considerable and harmful.

He says the step of naming Law Debt was not taken lightly but done to draw the attention of other debt collection agencies to the obligation of checking the accuracy of personal information in their use.

For more information about the case, read the Office of the Privacy Commissioner’s case note.


For more information, contact Charles Mabbett - 021 509 735.