ALRC proposes a more comprehensive credit reporting regime

The Australian Law Reform Commission has proposed the introduction of a more comprehensive credit reporting regime, in a Discussion Paper released today as part of its major review of Australian privacy law and practice.ALRC President, Professor David Weisbrot, said that the ALRC’s review was the first Australian inquiry to recommend such a change, following extensive consultations with the industry, consumer representatives and privacy advocates.

“At the moment, the Privacy Act generally allows credit files to include only ‘negative’ information, such previous defaults. Unlike the position in most countries, this makes it difficult for Australians to build up a record of responsible behaviour over time.

“If credit reporting agencies are able to gather a wider range of information, this may encourage improved lending practices and make it easier for some people on low incomes to obtain finance.

“We propose to expand the types of information that may be recorded on a credit file, to include information about current credit accounts, the dates those accounts were opened and closed, and the credit limits of each.

“This falls short of the much wider expansion sought by some credit reporting agencies and credit providers—but the ALRC is concerned to balance these market considerations with the protection of individual privacy,” Professor Weisbrot said.

Commissioner in charge of the Privacy Inquiry, Professor Les McCrimmon, said that the ALRC has identified a number of other important improvements to the credit reporting regime.

“In response to concerns about identity theft, we propose that an individual who has been a victim of identity theft should be able to advise credit reporting agencies and request that this be flagged on their file, so that any prospective credit provider is aware that an applicant for credit may be an impostor. This is becoming a major concern worldwide.

“We also propose a greater role for external dispute resolution, by requiring that any credit provider who lists debt defaults on credit information files to be part of an external dispute resolution scheme. This will provide a fast, simple process for consumers who wish to dispute a default listing,” said Professor McCrimmon.

These proposals are part of the ALRC’s broader Privacy Inquiry and are published in Discussion Paper 72, Review of Australian Privacy Law, which is available at no cost from the ALRC website, The ALRC is seeking community feedback on these proposals before the final report and recommendations are presented to the Attorney-General in late March 2008. Submissions close on 7 December 2007.