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July 20, 2012

New privacy credit reporting provisions

Schedule 2 of the Privacy Amendment (Enhancing Privacy Protection) Bill 2012 will, when passed, amend the credit reporting provisions in the Privacy Act by replacing Part IIIA with a new Part IIIA.

Commencement and disclosure of repayment history information
The credit reporting provisions have a deferred commencement of 9 months from the day after the Bill receives the Royal Assent.

But Schedule 6 will permit credit providers to disclose to credit reporting bodies repayment history information dating back to the date of Royal Assent. As the commencement period will be 9 months, this means that credit providers will be able to disclose approximately 9 months of repayment history information on commencement. The purpose of permitting this arrangement is to provide a meaningful amount of data on repayment history from the commencement of the new credit reporting system.

New kinds of personal information
The amendments permit additional kinds of credit related personal information about individuals in the credit reporting system.

The five new kinds of personal information are:

  • the date the credit account was opened
  • the type of credit account opened
  • the date the credit account was closed
  • the current limit of each open credit account; and
  • repayment performance history about the individual.

Repayment history information is only available to credit providers who are licensees under Chapter 3 of the National Consumer Credit Protection Act and subject to responsible lending obligations under that Chapter. In certain defined circumstances repayment history information is also available to mortgage insurers for mortgage insurance purposes.

Section 6V defines "repayment history information" as:
(a) whether or not the individual has met an obligation to make a monthly payment that is due and payable in relation to the consumer credit;
(b) the day on which the monthly payment is due and payable;
(c) if the individual makes the monthly payment after the day on which the payment is due and payable—the day on which the individual makes that payment.

Other provisions
Specific rules will also be introduced to deal with pre-screening of credit offers and the ban on access to an individual’s personal information in cases of suspected identity theft or fraud.

The credit reporting provisions will be supported by regulations and a registered Credit Reporting code which will provide details on the new types of information that can be collected. The Credit Reporting code will bind all credit reporting bodies.

A breach of the credit reporting requirements can result in a penalty of up to 2,000 penalty units: this amounts to a maximum of $220,000 for individuals and $1,100,000 for corporations, partnerships or multiple trustees.

A ‘penalty unit‘ has the meaning given by section 4AA of the Crimes Act 1914, currently $110 (corporations, partnerships or multiple trustees are liable for 5 times the maximum number of penalty units payable by individuals).

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Posted 20th July 2012 by David Jacobson in legislation, licensing, responsible lending