The new Credit Reporting Privacy Code sets out mandatory conditions for reporting default information, in particular when there is a hardship request, and how the notices required by the Privacy Act are to be given.
The Privacy Act
Section 6Q(1) of the new Part IIIA of the Privacy Act (applicable from 12 March 2014) sets out when a credit provider (CP) can collect and disclose default information.
The preconditions to the disclosure of default information are that the consumer credit payment must be overdue by at least 60 days, the overdue amount must not be less than $150, the claim must not be out of time and the CP must have issued the required default notice.
Separately, 21D(3)(d) prohibits a credit provider from disclosing default information about an individual to a credit reporting body unless the credit provider has given the individual 14 days’ written notice of its intention to disclose the information to the credit reporting body.
The Credit Reporting Privacy Code
Hardship
Paragraph 9.1 of the CR Code requires that a CP must not disclose a payment that has been overdue for at least 60 days in relation to consumer credit to a Credit Reporting Body as default information:
(a) if the individual has made a hardship request (whether via a variation of the terms and conditions of the consumer credit or new consumer credit); and
(b) either:
(i) the CP is in the process of deciding the individual’s hardship request, including if the CP is waiting upon information from the individual for the purposes of making that decision; or
(ii) if the CP decides to refuse the individual’s hardship request – until at least 14 days after the CP has notified the individual of this decision.
Paragraph 9.1 does not apply if the same hardship request was made during the previous 4 months.
Notices
Paragraph 9.3 expands the notice requirements:
(a) the CP must issue the Section 6Q notice and the Section 21D(3)(d) notice separately;
(b) the CP must issue the Section 6Q notice before the Section 21D(3)(d) notice;
(c) the CP must not issue the Section 21D(3)(d) notice less than 30 days after the issue of the Section 6Q notice;
(d) the CP must issue the Section 6Q notice and Section 21D(3)(d) notice by sending them to the individual’s
last known address at the time of despatch;
(e) the amount that is disclosed by the CP to the CRB as the amount that is overdue must have been overdue for at least 60 days and not be more than the amount specified in the Section 21D(3) notice, plus adjustments for interest, fees and other amounts, less any part payments prior to the date of disclosure by the CP to the CRB.
(f) the default information must not be disclosed by the CP to the CRB:
(i) earlier than 14 days after the date on which the Section 21D(3) notice is issued by the CP to the
individual; or
(ii) later than 3 months after that date; and
(g) the CP must meet the other requirements relating to default information that are set out in Part IIIA, the Regulations and this CR code.
These requirements are not limited to credit providers who hold an Australian Credit Licence.
Credit providers must incorporate these requirements in their procedures and forms.
