1 Feb 2010, 09:00

A man took out a loan with a finance company. His mother agreed to be guarantor for the loan.

Due to ill-health, the man was finding it difficult to meet weekly repayments on the loan and fell into arrears. He contacted the finance company and explained the delay in payment was due to the state of his health and a new repayment schedule was organised. However, over the following months the man was unable to keep up with repayments and the finance company contemplated enforcing its rights under the loan.

The man's mother contacted the finance company and requested information about repayments on the loan. The finance company provided this information to the mother. The mother then handed the information to her daughter-in-law who was a lawyer and authorised to act on her behalf.

The man complained to our office that the finance company disclosed his sensitive health information to his mother. He said his mother was not aware of his health problems and he had specifically asked the finance company not to disclose this information.

This complaint raised issues under principle 11 of the Privacy Act. Principle 11 provides that an agency that holds personal information should not disclose that information unless it believes, on reasonable grounds, that an exception applies.

The terms and conditions of the contract between the man and the finance company included an understanding that the obligations of the borrower in the loan agreement are implied into the guarantee as if the guarantor were the borrower.

The borrower and the guarantor also signed a privacy authorisation which allowed the exchange of information between the parties involved.

Principle 11(d) allows an agency to disclose information if it believes, on reasonable grounds, that the disclosure is authorised by the individual concerned. By agreeing to the terms and conditions, the man authorised his mother, as guarantor, to have access to information on the file.

The mother was also entitled to provide this information to her daughter-in-law who was acting on her behalf in dealing with the finance company.

There was no record on the finance company's file that the man had requested his health information be kept confidential. The finance company said that if the man had done so, it would have made a note on its file and it may have withheld the man's health information from the guarantor.

As the guarantor was authorised to access information about the loan, the finance company did not breach principle 11 when it disclosed this information to the man's mother.

We suggested to the finance company that health information may not always be a relevant disclosure to a guarantor and that it should consider this when it gets requests for information. The finance company said it would refer to this issue in future staff training on the Privacy Act.

Our view was that no breach of the Privacy Act had been committed by the finance company and our file was closed.

May 2010

Principle 11 - finance company - disclosure of health information to guarantor - authorised