Effective credit repair is often all about identifying faults and errors with the process a credit provider followed prior to listing a negative credit listing such as a payment default. The key is understanding the laws around credit reporting and comparing the process a credit provider followed with what they were legally required to do.
Legislation covering credit reporting is quite extensive and the reality is few credit providers are fully aware of their legal obligations when reporting an overdrew payment with a credit reporting agency, for this reason many credit listings such as payment defaults can be removed from from both Veda Advantage and Dun & Bradstreet credit files if approached in the right way. One key responsibility a credit provider must comply with when gathering personal information from a client is to disclose that any personal information collected may be passed on to a third party such as a credit reporting agency. Such a disclosure is often covered in a credit providers Terms and Conditions or Privacy Act Statement. The reality is however that some credit providers fail to reveal this to their clients at the time of gathering information and this is a clear beach of their legal obligations with regard to credit reporting.
You may think that it would only be smaller companies that would make such an obvious error however I can confidently state that there are many examples of this breach with a number of large organization’s not complying with this legal obligation. There is a common misconception that a commercial credit provider need not comply with this requirement and while much legislation surrounding credit reporting does only relate to consumer related matters the Privacy Act and the National Privacy Principles most certainly is applicable to commercial matters.
The actual legislation that covers this requirement is:
The Privacy Act 1988
IIIA – Credit Reporting
18E Permitted contents of credit information files
(8) A credit provider must not give to a credit reporting agency personal information relating to an individual if:
(c) the credit provider did not, at the time of, or before, acquiring the information, inform the individual that the information might be disclosed to a credit reporting agency.
FOS Bulletin 34
Credit Reporting Issues
The listing may also be in breach of other requirements of the Act:
• s 18E(8)(c) requires a credit provider, at the time the account is opened, to
disclose to the consumer that information might be disclosed to a credit
reporting agency. This means that, even if the information can be said to be
credit information, the listing would still be required to be removed if the
terms and conditions of the account at the time it was opened failed to disclose the possibility of listing.
Special attention should be given to the Financial Ombudsman’s Bulletin 34 which states” any negative credit listing made by a credit provider must be removed if at the time of providing credit it was not revealed that personal information may be provided to a third party such as a credit reporting agency” This is a critical point and even though some credit providers dismiss this as a technicality I can assure you that the Privacy Commissioner takes such matters very seriously indeed.
As stated, the ability to restore a credit file and improve a persons credit score is reliant on identifying legal faults and errors with how a listing was made, for this reason it is imperative to deal with a professional credit repair company such as Clean Credit Pty Ltd and few in the industry carry an in-depth knowledge of credit reporting laws and legislation.