The Privacy Commissioner is urging Australians to be aware that if they don’t pay their credit card bills and loans on time, it may impact on their ability to get credit in the future. Recent reforms to the Privacy Act 1988 (Cth) that received Royal Assent on 12 December 2012 mean that credit reporting agencies will soon be allowed to collect new kinds of credit-related personal information.
This includes repayment history information – that is, information about whether people have made or missed the full amount of a consumer credit payment. From March 2014, credit providers can pass this information on to credit reporting agencies. However, the information can relate to payments made or missed from December 2012. Australians need to be vigilant about their repayment history now.
‘It is now even more important that people keep an eye on their credit card and loan statements when they come in and avoid missing or making a late payment. Changes to the Privacy Act mean that late or missed credit card or loan payments may be included on your credit reporting file and could affect your ability to obtain credit in the future,’ Mr Pilgrim said.
The move to more comprehensive credit reporting means that credit providers are able to get a more complete picture of an individual’s ability to repay a loan or credit card.
‘If you want to see what information a credit reporting agency holds about you, you can request a copy of your credit reporting file for free in most circumstances. If you believe that the information is incorrect then you should ask the credit provider or credit reporting agency to correct this’ Mr Pilgrim said.
In a recent survey conducted by the Energy and Water Ombudsman NSW (EWON), it was found that ‘credit repair’ agents are charging customers large fees to seek to remove credit default listings on a customer’s behalf. Customers were paying minimum average fees of $1000 to seek to have each credit default listing removed and 70% of complainants using these agents had multiple credit listings.
‘There are alternatives to using ‘credit repair’ agents. If people consider there is an error on their credit reporting file they should contact the company the default is within the first instance. If they are not satisfied with the company’s response, a person can contact the Office of the Australian Information Commissioner or a relevant Ombudsman service, such as the Financial Ombudsman Service or the Telecommunications Industry Ombudsman whose services are free. There are also consumer credit legal centres that can help’.
The OAIC has produced a fact sheet for individuals to understand the changes to credit reporting – particularly repayment history information. OAIC Privacy Fact Sheet 16 Credit reporting – Repayment history information is available on the OAIC website: http://www.oaic.gov.au/publications/factsheets.html.