Privacy Commissioner Marie Shroff has amended the Credit Reporting Privacy Code to allow limited use of credit reporting information for anti-money laundering (AML) purposes.

From 30 June 2013, banks, finance companies and credit insurers will be required to verify their customers' identities, to make sure they are trading with real people who have a known history. The amendment means that these companies will be able to check customers against the credit reporting system to verify their identity.

"The change permits only certain classes of company - which are already part of the credit reporting system - to use this source of information," Ms Shroff explained. "We have sought to address the reasonable needs of the industry without undermining the integrity of the credit reporting system. Once the AML regime is fully operational, though, there may be evidence that a wider class of company should be able to get access to this information. If so, we can reconsider the limitation at that time."

The amendment also continues (for a further four years) the obligation for credit providers to tell existing customers if their credit information will be shared with credit reporters.

"Lenders must put existing customers in the picture before they start to share information about their credit accounts and repayment patterns with credit reporters," said Ms Shroff. "This is fundamental to maintaining openness and accountability."

ENDS

For further information contact: Katrine Evans on 021 509 735 or 04 494 7081.

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; limits who may access credit reporting databases; and provides retention periods for credit information held by credit reporters.

• The amendment will come into force in three stages on 29 March, 1 April and 30 June 2013.

• The code, the amendment and an explanatory information paper are available at www.privacy.org.nz.

• A public consultation phase on this amendment was completed in October 2012 and comments were received from a broad range of submitters. The submissions were largely supportive of the changes proposed. They are available on our website at http://privacy.org.nz/assets/Files/Codes-of-Practice-materials/Redacted-compiled-submissions-to-Amdmt-7-CRPC-2012.pdf