From 1 April 2005 credit reporters (such as Baycorp) were required to:
• provide individuals with free access to their own credit information. A reasonable charge can be made where access is sought in less than 5 working days; and
• have in place a clear, fast and effective complaints resolution process.promotes accurate, transparent and open credit reporting systems and will be fully in force by 1 April 2006.
This Code increases consumer rights with regards to the accuracy and privacy of their credit information. As businesses play an integral part in both the supply and access of credit information, it is important that their systems and procedures are in line with the Code.
What are the obligations of a business under the Code?
1. In an attempt to improve standards of reporting accuracy, the Code creates new obligations upon anyone who supplies information to credit reporters:
1.1. They must ensure that all information supplied is accurate.
1.2. They must update any credit information as soon as possible. This includes credit defaults and infringements.
1.3. They must ensure that information supplied is not misleading.
2. There are also new requirements that must be met before credit information will be supplied to businesses;
2.1. Reasons for the need to access the information must be disclosed each time a request is made to a credit reporter.
2.2. Businesses must co-operate with credit reporters to resolve complaints and when requests for correction of credit information are made.
2.3. Existing users of credit information will be denied access if their access is not permitted under the Code.
What are the benefits for businesses under the Code?
3. The accuracy of credit information will be improved by the Code. Both in the correct identification of individuals and the content of information on those individuals will be improved.
4. Consumer trust and public understanding of the process will be enhanced.
5. There will be a better and lower level dispute handling processes.
KEY POINTS TO NOTE:
• Individuals must be informed when information about the individual is going to be disclosed to a credit reporter. For example, an individual who is in default payments must be informed that that information is going to be passed on to Baycorp (one of the national credit reporters).
• The information that is passed on about an individual must be accurate, up to date, complete, and not misleading. Checks must be put in place to ensure that this occurs.
• Not only must the information supplied to credit reporters be correct at the time it was disclosed, but it must also be updated if circumstances change. Using the above example, if the individual pays the debt owing, then Baycorp must be notified of this as soon as possible.
• If an individual complains or requests a change in their credit information details, businesses must cooperate with credit reporters in their investigations. This includes providing documents that validate the information supplied to the credit reporter.
Sarah McKenzie is a partner at Preston Russell Law. Click here to contact her.
