Submission - Credit Reporting Regulatory Framework: Submission to ALRC Privacy Inquiry (December 2007)

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2.12. Listing rules

This section discusses listing rules for credit reporting information, including the definition of default, minimum value of default, minimum age of data etc.

Listing rules are an area where there is a significant divergence from the UPPs. Instead of providing a general test of ‘relevance’ for whether information is collected and listed, the current Part IIIA of the Privacy Act 1988 contains a prescriptive list of items that can and cannot be included in a credit report. It is likely that this situation will continue in the future, although the listing rules will be located in the proposed Privacy (Credit Reporting Information) Regulations.

Listing rules are relatively settled, although there are few areas of ongoing concern:

• Amount of default
  Stakeholders agree that a minimum amount of default should be specified in regulations before it can be listed. The current amount is $100 and this is widely considered to be too low by consumer stakeholders.
• Cheques
  There no longer appears to be support for listing cheques that have bounced twice.
• Old debts
  There is general support that statute barred debt should continue to be excluded. The current five year limit for including defaults also has support (7 years for bankruptcy). Some improvements are required for multiple listing and re-listing of old debts.
• Unenforceable debts
  There is growing support for debts that are unenforceable not to be listed (as the credit should never have been extended – for example credit extended in breach of Section 75 of the Uniform Consumer Credit Code).[34]
• Mandatory reporting
  There is opposition to proposals to require mandatory reporting of defaults.[35]

Listing rules should be located in the proposed Privacy (Credit Reporting Information) Regulations. It is recognised that listing rules may need to change from time to time (the growing irrelevance of cheques is a good example), and it may therefore be tempting to locate listing rules in a potential industry Code. However, it is likely that the regulations will be subject to regular review (perhaps every 3-5 years) and this should provide sufficient flexibility. Urgent changes can also be made to regulations if required.

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[34] Refer, for example, to Consumer Action Law Centre, Review of Privacy – Credit Reporting Provisions Submission in response to Issues Paper 32, 30 March 2007, page 12, <http://www.consumeraction.org.au/downloads/ConsumerActionSubmissiontoIssuesPaper32.pdf>, and Banking and Financial Services Ombudsman, Review of Privacy – Credit Reporting Provisions: Issues Paper 32 – Submission by Banking and Financial Services Ombudsman Limited, March 2007, page 11, <http://www.bfso.org.au/abioweb/ABIOWebSite.nsf/3f51d54074f36f08ca256bce00094be3/15f5fb12141475a3ca2572ba0010bdd6?OpenDocument>.

[35] Refer, for example, to Waters N, Implementing privacy principles in Credit Reporting Submission to the Australian Law Reform Commission on the Review of Privacy Issues Paper 32: Credit Reporting Provisions, Cyberspace Law and Policy Centre, 31 March 2007, page 10, <http://www.bakercyberlawcentre.org/ipp/publications/papers/ALRC_IP32_subm.pdf>, and Banking and Financial Services Ombudsman, Review of Privacy – Credit Reporting Provisions: Issues Paper 32 – Submission by Banking and Financial Services Ombudsman Limited, March 2007, page 12, <http://www.bfso.org.au/abioweb/ABIOWebSite.nsf/3f51d54074f36f08ca256bce00094be3/15f5fb12141475a3ca2572ba0010bdd6?OpenDocument>.

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