The Australian Privacy Foundation (APF) has come out swinging at the Federal Government’s proposed amendments to privacy legislation, which incorporates amendments to credit reporting law. During the Senate inquiry into the Privacy Amendments (Enhancing Privacy Protection) Bill 2012, the APF slammed the new laws as a “lost opportunity” to improve privacy, and specifically credit reporting practices. We look at the APF’s comments and what consumers should be concerned about in terms of these new credit laws for the health of their credit file, and ability to obtain credit in the future.

By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and

The APF’s comments appeared in a recent IT News article titled ‘Australian Privacy Foundation slams Privacy Amendments’.

APF board member Nigel Waters told the Senate inquiry that the proposed bill would “significantly weaken” privacy protections for Australians and fail to meet current international best practice standards.

“While we are impatient for reform, we sadly feel that there are so many flaws in this package that it should not be enacted,” Waters said.

“It should be withdrawn for further work to address the many criticisms that have been made in submissions.”

IT News says Waters’ argument to the inquiry closely followed those made by the organisation in its written submission to the Senate committee, in which the APF accused the Government of cherry-picking recommendations from a 2008 inquiry into privacy reform.

Here is more from this story:

The APF was especially critical of amendments to the credit reporting regime, which the organisation said could be used against consumers, rather than helping to meet responsible lending obligations.

Richard Glenn, assistant secretary at the Attorney-General Department’s business and information law branch, told the Senate inquiry earlier that morning that the revised regime would give credit providers “a greater richness” of information from which to make judgements about whether a person is eligible for credit.

But Waters said the provisions would only accrue a “major loss of financial privacy for uncertain benefit”.

“Although it will help in some ways, the balance, we fear, will be detrimental to consumers,” he said.

Members of the financial industry called on the Government to delay the introduction of the credit reporting regime until later than the September 2013 deadline currently expected, for fear of being unable to become compliant with included requirements.

Whilst I am in favour of any new laws which will facilitate an ease of correction of credit reporting mistakes, I have echoed the concern over the “loss of financial privacy” many times. One aspect I have maintained concern about is the additional information which will be made available to lenders in the form of late payment notations.

It seems ludicrous to give Creditors more powers to effect a credit rating in the form of late payment notations (especially when those notations may not be subject to the same rules as an official credit listing would be) when they are having trouble getting credit reporting right as it stands now.

Late payment notations will be added to credit files by licenced creditors even if a bill is one day late. The notation will remain on the consumer’s credit file for 2 years. See more in this story: Access Denied… How late payments may ruin your home loan application.

In this post I urge consumers to be on their guard with this new type of bad credit – late payments – and I predict it will have an impact on those people that otherwise should qualify for a loan.

Initially lenders will probably err on the side of caution, particularly if the economy isn’t great and adopt a policy of exclusion rather than inclusion to the credit market.

Many people will take a big gulp when they think about all the bills they have paid late – often more through accident than not having the money – which could now see their loan declined. Who says how many is too many late bill payments? Would three a year be too many, or two in six months?

And who says when this information will start being collected? I think if you want credit in the future (most of us) you should be on your guard now, be vigilant with making payments ON TIME every time to ensure these late payment notations don’t stop you from getting credit in the future.

Despite new legislation giving consumers the legal avenue severely lacking in the current laws in some cases to be able to effectively dispute an unfair or incorrect credit file listing, it will continue to be up to the consumer to know the law to be able to apply it to their own case, and this is where credit rating repairers will continue to be needed – to close the gap and help enforce the legislation that Creditors are bound to comply with.

Credit rating repairers will also continue to be needed – along with consumer groups such as the APF, to ensure that consumers are given a voice following the introduction of these privacy amendments. To put our hands up on behalf of consumers if needed and give accounts of any difficulties that may arise.

Image 2: healingdream/