Privacy Commissioner Marie Shroff announced changes to credit reporting regulation with a new amendment to the Credit Reporting Privacy Code. Amendment No.4 is the result of a two year review of the code, and included an extensive consultation process with a reference group of consumer and industry representatives.
Amendment No.4 brings in two key changes. Credit reporters will be able to collect and use more information about people and, for the first time, credit reporters may collect drivers licence numbers to be able to match people’s credit information more accurately.
One effect of the changes is that credit reports will show more information about current credit accounts – for example the type of account, the credit limit, and whether the account is open or closed. Until now, credit reports only contained details such as a person’s failure to pay a debt and credit enquiries (when a person asked for a loan or wanted to buy something on hire purchase).
A further effect is that credit reporters will be allowed to use driver licence numbers to match credit information about individuals. “This will help make sure that the right information is reported about the right individuals and help avoid mistakes,” said Mrs Shroff.
“I think that the changes will bring substantial benefits to individuals in their dealings with the credit system. There should be more accuracy and completeness in the credit reporting system and this should enable better assessments of creditworthiness and more responsible lending,” said Privacy Commissioner Marie Shroff.
“However, I am very aware that more comprehensive reporting also means more intrusion into people’s financial lives. It involves wider sharing of private financial information,” Mrs Shroff said.
“Given the substantial increase in sensitive financial information that will become available to third parties on credit reporting databases, Amendment No.4 also has strong new controls to protect privacy. These additional controls are necessary to protect individuals and ensure that the credit reporting system is trustworthy and accountable,” Mrs Shroff said.
The new controls include limiting who can see credit account information. Prospective landlords and employers, for example, will not be able to access the new positive information. Also, credit reporters must now conduct a robust auditing process and must report to the Commissioner each year.
To make sure that the driver licence numbers are not misused or made available to others, credit reporters will be required to convert the driver licence number into a new number and retain and use only that number. This will prevent credit reporters building up databases of driver licence numbers.
“This amendment represents a major change to the regulation of credit reporting in New Zealand,” Mrs Shroff said. “There was wide support for a number of the changes, both where they expand the credit reporting regime and where they impose further obligations on credit reporters to safeguard privacy. Of course, there were concerns with the expansion of the credit reporting regime. I carefully considered all aspects and believe that the Amendment strikes the right balance.”
A copy of Amendment No.4 is available at www.privacy.org.nz/credit-reporting-privacy-code/ along with an information paper.
Source: Office of the Privacy Commissioner of NZ