The Australian Competition and Consumer Commission has announced that it proposes to approve an application for authorisation for five years to the Australian Retail Credit Association Ltd (ARCA) in relation to principles for exchanging comprehensive consumer credit data between signatory credit reporting bodies and lenders.
Since March 2014, the Privacy Act 1998 allows the collection and disclosure of consumer credit liability information and repayment history information (positive reporting).
The proposed Principles of Reciprocity and Data Exchange (PRDE) is a set of principles applicable to:
- Credit Reporting Bodies (CRBs) (also known as credit bureaus); and
- Credit Providers (CPs) (eg, financial institutions, telecommunications companies, utilities and some retailers).
that become signatories to the PRDE and agree to abide by its principles to ensure those CPs and CRBs have trust and confidence in their credit reporting exchange.
ARCA seeks authorisation in relation to provisions in the PRDE that fall into the following general categories:
- Reciprocity obligations: where obligations are placed on the ability of signatories to the PRDE to provide/acquire particular types of information to/from certain parties;
- Consistency obligations: where CPs are required to deal with all CRBs with which they have a services agreement on a consistent basis; and
- Enforceability provisions: which provide sanctions for noncompliance.
The PRDE only applies to CRBs and CPs that choose to become signatories. Non-signatories are not bound by the PRDE in the exchange of any credit information and signatories can still deal with non-signatories in relation to negative information as they did prior to the amendment of the Privacy Act in March 2014.
The ACCC considers that the provisions will help overcome a reluctance in the industry to share consumer credit information, facilitating a more complete exchange between credit providers and each credit reporting body.
The ACCC accepts that there are some potential public detriments arising from the costs imposed by the provisions.
The ACCC is seeking submissions from interested parties in relation to its draft determination, before making a final decision. Submissions are due by 14 August 2015.
