Greenleaf, Graham --- "Credit Reporting Advice Summaries (cont.)" [1994] PrivLawPRpr 73; (1994) 1(5) Privacy Law & Policy Reporter 94

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Credit Reporting Advice Summaries (cont.)

Australian Privacy Commissioner - Federal Privacy Handbook, p1243 (Release 3, March 1994) - Privacy Act 1988 (Cth) Part IIIA

The Privacy Commissioner's summaries of written advice he has given to the credit industry and others are the unofficial ''lore' around which credit reporting practices are based. (See 1 PLPR 74 for the first part of this note.) References are to paragraph numbers of the advice summaries.

Agents of an individual

The s18H(3) agency arrangements are intended to facilitate genuine intermediary arrangements in credit provision (for example finance brokers or credit counsellors) and ''not to provide a ''back door' method by which non- credit providers, such as insurers, may obtain direct access to consumer credit information in the possession of a credit reporting agency' [4.1]. Nor are the agency arrangements in s18N(1)(ga) intended to allow such ''back door' access to information held by credit providers [4.2]. Credit providers should not provide information to real estate agents or builders relying on s18N(1)(ga) [s4.4]. Investment advisers should obtain agency authority from their clients [4.5]. Credit providers who knowingly or recklessly disclose consumer credit information to persons not properly appointed as agents may face fines of up to $150,000 for breaches of s18N [s4.6].

A recommended form of appointment of an agent has been issued as Fact Sheet 5 (p 1237 of the Handbook), and it is highly desirable that such appointments be revocable by the individual at any time [4.3].

An agent of a credit provider cannot also be the agent of the individual, because a credit provider cannot be such an agent, and an agent of a credit provider is also a credit provider for the purposes of the Act (s11B(5)). Finance brokers cannot therefore act as agents for both parties under the Act [4.7]. It is possible that a business that acts as a credit provider as part of its business could nevertheless be a genuine agent for individuals to whom it was not providing credit [4.10].

If a person was so disabled that they could not appoint an agent under the Act, a credit provider could only disclose details of the disabled person's account to another person managing that account (a relative, in the particular case) if the other person was authorised to manage the account by a court or a power of attorney [4.8].

If a person is accompanied by an interpreter, and it is clear that the interpreter is acting on the person's behalf, it is not necessary to obtain a written agency agreement. It would, however, be necessary before telephone disclosures could take place [4.9].

Individuals' access rights

Insurers, real estate agents and other non-credit providers have attempted to have individuals obtain copies of their own credit reports under s18H and then disclose it to them. ''While the Act does not restrict an individual's use of a credit report, the Privacy Commissioner considers it would be an undesirable practice for any non-credit provider to request an individual to furnish it with a credit report for purposes unrelated to the granting of consumer credit.' [5.1] A credit provider's s18H(2) obligation to provide access to individuals to credit reports (that is, from credit reporting agencies) about them continues if the credit provider merely transposes the report into a new format, but ceases if the credit provider makes additions or deletions to the information [5.2]. The obligation continues even if the credit provider only holds the report in computerised form [5.3]

This note will be continued in the next issue.

Graham Greenleaf.