Greenleaf, Graham --- "Reports and submissions" [1996] PrivLawPRpr 71; (1996) 3(8) Privacy Law & Policy Reporter 153

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Reports and submissions

PRIVACY COMMISSIONER REJECTS `POSITIVE' CREDIT REPORTING

Financial System Enquiry Discussion Paper (Cth), November 1996 (Wallis Inquiry)

Privacy Commissioner (Cth) -- Submission to the Financial System Enquiry, January 1997

The Wallis Inquiry's Discussion Paper in Chapter 8 `Consumer Protection' says the Enquiry will examine two issues:

1. What principles should guide any extension of the privacy regime?
2. Which regulator should be responsible for administering privacy protection in the financial sector?

The Privacy Commissioner's submission is unambiguous in its answers:

1. It is important that universal privacy standards apply across the private sector.
2. As envisaged in the Attorney-General's Discussion Paper on extending the Privacy Act to the private sector, the Privacy Commissioner would be the `final arbiter', where necessary, on privacy complaints, but `disputes would first be addressed at the local level by the organisation concerned, or by an industry ombudsman where one exists (for example, the existing Banking Industry Ombudsman)'.

The Wallis Inquiry's Discussion Paper also notes in passing two proposals by financial institutions to Wallis, which the Privacy Commissioner's submission rejects as subverting the basic elements of information privacy.

`Positive' surveillance revived

A number of submissions to Wallis, including by Westpac, have suggested that Pt IIIA of the Privacy Act should be amended to allow `positive' credit reporting. `Positive' reporting was proposed in the late 1980s by the Credit Reference Association of Australia (CRAA), and would have involved all financial institutions which send reports to CRAA sending monthly reports on the payment performance of all their credit customers, whether or not those customers were currently or ever had been in default on a loan. This proposal for continuous disclosure and surveillance of the financial affairs of a large percentage of the Australian population (which Wallis rather limply describes as `reporting good credit behaviour') was effectively stopped at the Australian Privacy Foundation's `summit meeting' on credit reporting, at which the Commonwealth Attorney-General and the Minister for Consumer Affairs jointly announced that `positive reporting' would be banned, and the rest of credit reporting practices brought under the Privacy Act for good measure. The 1990 credit reporting amendments were the eventual result.

The Privacy Commissioner's submission says that high level of intrusion into the affairs of the majority of non-defaulting Australians in order to attempt to minimise the level of default `is hard to justify'. `This mass surveillance was rejected by Federal Parliament in 1989 in passing the credit reporting amendments to the Privacy Act. Nothing has changed in the last eight years to make this major privacy intrusion any more acceptable now than it was then', according to Acting Privacy Commissioner Nigel Waters. Community expectations of privacy are not consistent with such a change, the submission says.

Open slather between related companies?

Other companies, including the ANZ Banking Group and the AMP Society, would like to be able to swap marketing and credit information on customers within the different companies in their groups, enabling them to build detailed customer profiles and engage in cross-selling of products. This is at present prohibited by Pt IIIA of the Privacy Act 1988, at least in relation to credit reports, unless the consent of the customer is first obtained. AMP, for example, would like the `opt in' approach of customer consent to be reversed to one where customers had to take the initiative to `opt out' from disclosures to other parts of AMP. Inertia would limit the number who do.

The Privacy Commissioner's submission says that allowing credit reports to be used for marketing `directly cuts across the letter and intent of Pt IIIA', and the more general question of using other personal information collected by one entity for the marketing purposes of a related entity `is at the crux of privacy concerns'. The Commissioner considers that `unless they are advised to the contrary, it is fair to say that most customers who have entered into a relationship with one entity of a corporate group are unlikely to be aware of the breadth of corporate activities carried out by the group'.

Comment

It is clear that major elements of the finance industry would like to use Wallis to reverse most of the key privacy protections of the 1990 credit reporting amendments. CRAA is as yet keeping silent, no doubt influenced by the fact that it made such a disaster of leading the campaign for positive reporting last time. Whether the credit industry is preparing for a united push to reverse financial privacy, or whether its views are fragmented, is not yet clear.

The extent to which the proposed private sector extensions to the Privacy Act preserve the level of financial privacy in Pt IIIA will be one of the principle `litmus tests' of whether the new Commonwealth government intends to protect privacy or subvert it. The Privacy Commissioner's approach to Wallis indicates an intention to guard this important public interest.

Graham Greenleaf, General Editor.

NT OPPOSITION WANTS `INFORMATION OMBUDSMAN'

Maggie Hickie (Leader of the Opposition, Territory Labor) Protection from the Misuse of Personal Information (Discussion Paper, October 1996)

The NT Labor Party's Discussion Paper indicates that they favour legislation to implement information privacy principles (IPPs), but includes few specific commitments other than the following:

• to protect `information held on medical records and electoral rolls which has been a source of concern in recent times';
• a limit on the use of information to the purpose for which it was collected;
• an emphasis on `jointly developed Codes of Conduct rather than penalties and sanctions'; and
• an office of `Information Ombudsman' to report directly to the Parliament, with `power to issue enforcement notices' requiring compliance with IPPs, possibly to also be responsible for appeals against FOI decisions.

The Discussion Paper says the legislation should cover `all record holders in the NT Government's operations with a limited power to exclude by regulation'.

Copies or details may be obtained from Mark Nelson, Legal Adviser, Office of the Opposition Leader, NT Government, ph: [phone]

Comment

The NT Opposition paper coincides with the Government's development of an options paper (see <3 PLPR 100>). It also shows how debased the word `Ombudsman' has become -- enforcement powers and hearing appeals are antithetical to the original concept of an ombudsman as someone who can investigate, recommend, conciliate, persuade, publicise, and that's all (the NSW Privacy Committee, for example). NT Labor is really recommending an Information and Privacy Commissioner with enforcement powers, as it should in the 1990s.

Graham Greenleaf, General Editor.