Bad Debt Files Purged After Privacy Watchdog's Finding
Sydney Morning Herald
Friday August 27, 2004
A database used to assess people's financial histories is removing 65,000 records of bad debts that could be inaccurate, prompting calls for tighter regulation of the burgeoning credit reference industry.
The credit bureau Baycorp Advantage has agreed to remove the files, which involve records from the defunct telephone company One.Tel, after the federal privacy commissioner found One.Tel's liquidator had not updated records once debts had been paid, and the defaults were questionable.Baycorp Advantage has now barred the liquidator from using its database. Consumer Credit Legal Centres in NSW and Victoria said the problem highlighted growing concern that a credit reporting system run by private companies with "minimal oversight" was fraught with problems and was harmful to consumers. The groups want a review of federal privacy legislation, announced this month, to be expanded to cover credit reporting."Consumers need to know that any credit reporting database, which can create havoc in their lives and affect major events like the purchase of a home, is accurate and not open to abuse," said Katherine Lane, the principal solicitor with the NSW Consumer Credit Legal Centre.Ms Lane said the complaints process was unworkable, and consumers who found themselves incorrectly listed waited more than six months for action.The concern comes amid strong growth in the credit reporting and debt collection industry. Baycorp yesterday reported a yearly profit up 56 per cent amid "strong consumer credit activity".
© 2004 Sydney Morning Herald