Submission on the Proposed Credit Information Privacy Code Introduction: YouthLaw Tino Rangitiratanga Taitamariki (“YouthLaw”) welcomes the proposal by the Office of the Privacy Commissioner to develop and implement a regulatory system for personal credit information with the proposed Credit Information Privacy Code (“the Code”). Such an initiative is long overdue and is likely to be of great benefit to the community, in particular, young people whom YouthLaw represents. Young people are becoming increasingly involved in the credit industry as consumers yet they are often not aware of the implications of credit reporting, or of the fact that personal credit information is being collected about them every time they interact with a credit provider. Criticisms of the Present Situation: As was correctly pointed out in the commentary accompanying the proposed code, in New Zealand, there is currently no specific laws relating to credit providers, credit reporters or credit information in general (other than the general application of the Information Privacy Principles in the Privacy Act 1993). Therefore, the credit industry in New Zealand is an industry in need of regulation - for its own good, as well as that of the general public. Those involved in the industry have access to, and control of highly sensitive information relating to specific, identifiable individuals and their personal finances. Given this, the next issue is the method and extent of regulation. YouthLaw acknowledges the need for any regulation in this area to be as streamlined as possible in order to avoid difficulties for consumers when obtaining credit - an inevitable result of over-regulation of the credit reporting industry. Nevertheless, we submit that too little regulation would be self-defeatist and would not achieve the purpose for which it was intended. Therefore it is essential that any regulation achieve an effective balance between the rights of the consumer to security and accuracy of their personal information, and the needs of the credit reporting industry to provide information to credit agencies in an efficient and timely manner. In our view, the Code is successful in achieving this balance of needs. We further note that the Health Information Privacy Code - on which the Code is modelled - has proven to be highly effective and successful since its implementation in 1994. Recommendations:
In the experience of YouthLaw young people are frequently unaware of their rights - particularly in the area of privacy. For this reason, the level of information passed back to consumers needs to be increased. Consumers should have a right to be informed of what information about them is being collected by credit reporters and used by credit agencies. Therefore, YouthLaw proposes that consumers be given a copy of their credit report (as used by the credit provider they are dealing with at the time) each time the report is used. This way, consumers will be able to see what the credit provider sees when that provider is making a decision about whether or not to provide credit to that consumer. Such a requirement should not be at all arduous for either credit reporters or providers, with the costs involved (if any) likely to be minimal. Consumers should not be required to request a copy of the report used before they are allowed access to it (although under the provisions of the Privacy Act 1993 such a request would have to be complied with) but rather, they should be provided with a copy automatically. Such a requirement would allow errors or disputed information on the consumer’s credit report to be brought to their attention sooner - this would be particularly beneficial in cases where an application for credit was refused as a result of an error or dispute on the report. Conclusion: The Code has the potential to be beneficial for consumers as well as for those involved in the credit industry. In its present form the Code will likely achieve the purposes for which it was intended. However, YouthLaw submits that the proposed broadening of the provisions relating to the sharing of consumer’s personal credit information with them will lead to a greater level of openness, and a greater awareness of rights - particularly amongst young people. We reiterate our unconditional support for the Code and again congratulate the Privacy Commissioner (and his Office) for this initiative, and we encourage the expeditious implementation of the Code.