Last week, I was asked if I knew anything about how Privacy arrears listed with a Credit Reporting Body (“CRB”) could be updated.
The lender wanted to increase the amount of Privacy arrears that had been listed previously with a CRB because of further non-payment. The only way I thought possible was to issue a further Section 21D of the Privacy Act notice but suggested the lender approach the CRB and ask them directly.
After a couple of days, the lender phoned me. He said he’d called both illion and Equifax. Each had referred the matter to their legal departments and informed him that there was nothing in either the Privacy Act or Credit Reporting Code (“CR Code”) to prohibit this. They said all the lender had to do was edit the Privacy arrears amount recorded on their systems with the increased amount. I was astounded!
Whilst their legal departments are correct and so it might be technically possible to do this, this is not in the spirit of the legislation. After having issued a Section 21D notice, the lender has to give the consumer a period of time in which to stop the Privacy arrears being reported to and recorded by the CRB.
How long that period is depends on when the Section 21D notice was issued. It will not be less than 60 days after the date of issue of a Section 88 Default Notice under the National Credit Code.
The suggested process by-passes this completely. It not only denies the consumer their right to pay out the higher arrears amount within legislated time periods but no further Section 88 notice may have even been issued by the lender.
Don’t do this – update your Privacy arrears properly!
I have discussed this with two lawyers and both agree with my comment. Each recommended lenders do not try and use this technicality and suggested we take this up with the Office of the Australian Information Commissioner with a view to removing this loophole. Industry has enough issues with Credit Repair companies seeking to remove properly listed CRB Privacy Default listings without adding to their abilities to challenge your processes.
The other unknown factor is how, if the matter was referred to the Australian Financial Complaints Authority (“AFCA”, would it view the matter. If the matter went as far as Determination, it would be a costly exercise and there is no outcome guarantee.
For these reasons, if you want to increase the amount of indebtedness reported, do it properly. Accelerate the debt if you’re contract allows for this and follow the processes set out in the Privacy Act and CR Code or take the debtor to Court and obtain judgment.