55.12 As discussed in more detail in Chapter 53, the credit reporting provisions of Part IIIA of the Privacy Act set out what information may be included in a credit information file. Section 18E(1) provides that a credit reporting agency may include information that identifies the individual in question and sets out an exhaustive list of the other categories of personal information that may be included in the file. The information that may be contained in a credit information file includes a record of:
a credit provider having sought a credit report in connection with an application for credit, and the amount of credit sought (inquiry information);
a credit provider being a current credit provider in relation to the individual (current credit provider status);
credit provided by a credit provider to an individual, where the individual is at least 60 days overdue in making a payment on that credit;
a cheque for $100 or more that has been dishonoured twice;
a court judgment or bankruptcy order made against the individual;
a credit provider’s opinion that the individual has committed a specific serious credit infringement.
55.13 With the exception of inquiry information and current credit provider status, this list contains mainly so-called negative information, such as information relating to the individual having defaulted on a loan. In effect, more comprehensive credit reporting is currently prohibited under the Privacy Act.
55.14 There are many different models of more comprehensive credit reporting, as discussed below. Most jurisdictions that permit some form of more comprehensive credit reporting, however, include some or all of the following types of personal information:
information about an individual’s current loans or credit facilities, including the balances;
an individual’s repayment history;
information about an individual’s bank and other accounts, including the identity of the institution where the account is held and the number of accounts held; and
further information than is currently permitted under the Privacy Act relating to overdue or defaulted payments.
55.15 Reform to permit the collection and use of such categories of personal information in credit reporting would represent a significant extension of the current system in Australia.
55.16 Since the 1980s, both before and after the enactment of the credit reporting provisions, Australian federal and state governments have on several occasions considered the introduction of more comprehensive credit reporting.
Credit Reference Association of Australia proposal
55.17 As noted in Chapter 52, there was a push in the late 1980s for the introduction in Australia of a form of more comprehensive credit reporting. In that year, the Credit Reference Association of Australia (CRAA) stated its intention to collect information about individuals’ current credit commitments. This plan was postponed, however, at the request of the then Australian Government Minister for Consumer Affairs, the Hon Nick Bolkus. Subsequently, the federal Parliament passed the Privacy Amendment Act 1990 (Cth), which had the effect of prohibiting ‘positive’ credit reporting.
55.18 There were a number of concerns about the CRAA’s proposal. The New South Wales Privacy Committee feared that the CRAA’s proposal ‘would greatly increase the quantity of personal information held by CRAA’, and it may be too widely available. The Australian Computer Society was concerned that this was ‘an extremely privacy-invasive measure’ demanding ‘substantial justification’. It maintained that no detailed justification was publicly presented.
55.19 Prior to the passage of the Privacy Amendment Act 1990 (Cth), the then Minister for Consumer Affairs stated that one of the government’s aims in passing this legislation was to ‘tackle the whole question of positive reporting’. He noted that the government’s rejection of ‘positive reporting’ was endorsed both by the Opposition and the Australian Democrats. In the Second Reading Speech, the Minister went further, stating that so-called ‘positive reporting’ represents an unwarranted ‘intrusion into individuals’ lives’ and that:
The Government does not consider that there is any proven substantial benefit from the positive reporting proposals and that in view of the strong privacy concerns held by the community this massive expansion of the extent of information held about individuals should not be allowed to develop.
Financial System Inquiry (Wallis Report)
55.20 The Financial System Inquiry, chaired by Mr Stan Wallis, discussed the issue of more comprehensive credit reporting in its 1997 final report (the Wallis report). The Wallis report stated that the inquiry was not in a position to assess whether the benefits of positive credit reporting outweighed the costs, but considered the potential benefits warranted a complete review of the issue.
55.21 The Wallis report recommended that the Attorney-General should establish a working party, comprising representatives of consumer groups, privacy advocates, the financial services industry and credit reference associations to review the existing credit provisions of the Privacy Act. The purpose of this review should be to identify specific restrictions that prevent the adoption of world best practice techniques for credit assessment, and evaluate the economic loss associated with these restrictions against the extent to which privacy is impaired by their removal.
Senate Legal and Constitutional References Committee
55.22 The inquiry undertaken in 2005 by the Senate Legal and Constitutional References Committee (Senate Committee privacy inquiry) included consideration of credit reporting. Generally, the inquiry stated that while ‘government action is required to maintain community confidence in [the] integrity of the credit reporting regime’, it did ‘not see any need for review or reform of Part IIIA at this time’.
55.23 Specifically, the Senate Committee privacy inquiry recommended ‘that the Privacy Act not be amended to allow the introduction of positive credit reporting in Australia’. It explained this position by saying:
The committee sees no justification for the introduction of positive credit reporting in Australia. Moreover, the experience with the current range of credit information has shown that industry has not run the existing credit reporting system as well as would be expected and it is apparent that injustice can prevail. As mentioned elsewhere in this report, positive reporting is also rejected on the basis that it would magnify the problems associated [with] the accuracy and integrity of the current credit reporting system. The privacy and security risks associated with the existence of large private sector databases containing detailed information on millions of people are of major concern.
55.24 The Australian Government disagreed with the Senate Committee privacy inquiry’s recommendation concerning credit reporting and stated that review of the credit reporting provisions is a matter that would be considered as part of the ALRC’s inquiry.
Senate Economics Committee
55.25 The Senate Economics Committee also considered the issue in its 2005 report Consenting Adults, Deficits and Household Debt: Links between Australia’s Current Account Deficit, the Demand for Imported Goods and Household Debt. The Committee stated that it was not persuaded to take a different view to that expressed by the Senate Legal and Constitutional References Committee.
The Committee does not believe that credit providers are making full use of the information currently available to them. Further … defaults and other signs of financial distress in the credit card market are very low and do not justify the very significant change that would be required for positive credit reporting to be introduced. The Committee does not consider that any further parliamentary inquiry into this matter is justified at this time.
Victorian Consumer Credit Review
55.26 Finally, the 2006 Victorian Consumer Credit Review (the Victorian Review) dealt with comprehensive credit reporting as part of a broad review of the efficiency and fairness of the operation of credit markets and the regulation of credit in Victoria.
55.27 The Victorian Review received a large number of submissions on the benefits and limitations of the current system of credit reporting, and in relation to proposals to institute more comprehensive credit reporting. Ultimately, it concluded that a form of more comprehensive credit reporting should not be introduced, at least ‘while substantial questions remain about whether the benefits outweigh the costs’, and it suggested further research and analysis in this area.
55.28 In its response to the review, the Victorian Government agreed that comprehensive credit reporting should not be implemented in Victoria on the ground that ‘there is insufficient evidence’ to show that it would be more beneficial than not to implement such a system. It went on to state that responsibility for ‘further research and analysis’ in this area should be borne by the Australian, as distinct from the Victorian Government.
Privacy Act 1988 (Cth) s 18E(1). In addition, Privacy Act 1988 (Cth) s 18E(2) prohibits certain categories of personal information from being included in an individual’s credit information file.
 A more complete description of the permitted categories of personal information is contained in Ch 53.
Privacy Act 1988 (Cth) s 18E(1)(b)(i). The information may be kept for a maximum of five years after the relevant credit report was sought: s 18F(2)(a).
 Ibid s 18E(1)(b)(v). The information may be kept for a maximum of 14 days after the credit reporting agency is notified that the credit provider is no longer the individual’s credit provider: s 18F(2)(b).
 Ibid s 18E(1)(b)(vi). The information may be kept for a maximum of five years after the credit reporting agency was informed of the overdue payment concerned: s 18F(2)(c).
 Ibid s 18E(1)(b)(vii). The information may be kept for a maximum of five years after the second dishonouring of the cheque: s 18F(2)(d).
 Ibid s 18E(1)(b)(viii), (ix). A record of judgment may be kept for a maximum of five years after the judgment was made: s 18F(2)(e). A record of a bankruptcy order may be kept for a maximum of seven years after the order was made: s 18F(2)(f).
 Ibid s 18E(1)(b)(x). The information may be kept for a maximum of seven years after the information was included in the credit information file: s 18F(2)(g).
 Ibid s 18E(1)(b)(i).
 Ibid s 18E(1)(b)(v).
 This prohibition derives from the interaction of ss 18E and 18K. Section 18K(2)(a) provides that a credit reporting agency must not disclose personal information if the information does not fall within the permitted categories in s 18E. Similarly, s 18E(8)(a) provides that a credit provider must not disclose personal information to a credit reporting agency if the information does not fall within the permitted categories in s 18E. These provisions are summarised in greater detail in Ch 53.
 See, eg, Centre for International Economics and Edgar Dunn and Company, Options for Implementation of Comprehensive Credit Reporting in Australia [Prepared for MasterCard Worldwide] (2006), 2.
 The personal information that may be used currently in credit reporting is summarised in Ch 53.
 R Clarke, Consumer Credit Reporting and Information Privacy Regulation (1989) Australian Computer Society, [3.1].
 New South Wales Government Privacy Committee, Annual Report (1989), 23.
 Ibid, 22.
 R Clarke, Consumer Credit Reporting and Information Privacy Regulation (1989) Australian Computer Society, [3.2].
 Commonwealth, Parliamentary Debates, Senate, 15 August 1989, 13 (N Bolkus—Minister for Consumer Affairs).
 Commonwealth, Parliamentary Debates, Senate, 2 November 1989, 2788 (N Bolkus—Minister for Consumer Affairs).
 Financial System Inquiry Committee, Financial System Inquiry Final Report (1997), 519–521.
 Ibid, 521.
 Ibid, rec 99.
 Parliament of Australia—Senate Legal and Constitutional References Committee, The Real Big Brother: Inquiry into the Privacy Act 1988 (2005).
 Ibid, [7.44]–[7.45].
 Ibid, rec 17.
 Ibid, [7.46].
 Australian Government Attorney-General’s Department, Government Response to the Senate Legal and Constitutional References Committee Report: The Real Big Brother: Inquiry into the Privacy Act 1988 (2006).
 Parliament of Australia—Senate Economics Committee, Consenting Adults, Deficits and Household Debt—Links Between Australia’s Current Account Deficit, the Demand for Imported Goods and Household Debt (2005), [5.61]–[5.87].
 Ibid, [5.87].
 Victoria has its own legislation on credit reporting: Credit Reporting Act 1978 (Vic). The Victorian Consumer Credit Review concluded that the Victorian legislation should be repealed because it has been superseded by the credit reporting provisions of the Privacy Act 1988 (Cth): Consumer Affairs Victoria, The Report of the Consumer Credit Review (2006), 280.
 Consumer Affairs Victoria, The Report of the Consumer Credit Review (2006), 280.
 Victorian Government, Government Response to the Report of the Consumer Credit Review (2006), 17.