KB and Veda Advantage[2016] AICmr 81: Compensation for Credit Report Error
Friday 10 February 2017 @ 9.56 a.m. | Corporate & Regulatory | Legal Research | Trade & Commerce
In the case of KB and Veda Advantage[2016] AICmr 81, a small typographical error, in this instance, a court issued debt notice for $7,000 against someone with a similar name (the same surname but a different first name), who happened to live in the same apartment complex, caused the Applicant (KB) to have his credit cards cancelled while he was on an overseas trip. The credit reporting agency Veda Advantage Information Services and Solutions (Veda) had then assumed that this was KB and informed his banks and cancelled his credit cards.
Background to the Case
The debt actually belonged to another individual, but the error triggered an automatic alert to KB’s creditors, which resulted in cancellation of his credit card. He also owned two businesses and had given suppliers details of another credit card, which was also suspended, causing delays in payment and supply of goods.
The individual was travelling overseas when he discovered his cards had been cancelled. On returning to Australia and seeing a copy of his credit report, Veda advised him that he would need to approach the court for a correction.
About Credit Reporting Laws
One of the objects of the Privacy Act 1988 (Cth) (the Act) is to facilitate an efficient credit reporting system while ensuring that the privacy of individuals is respected. In recognition of that objective, the laws about credit reporting are intended to balance individuals’ interest in protecting their personal information with the need to ensure that credit providers have sufficient information available to assist them to decide whether to provide an individual with credit.
The Australian credit reporting system also helps ensure that credit providers are able to comply with their responsible lending obligations under the National Consumer Credit Protection Act 2009 (Cth) administered by the Australian Securities and Investment Commission (ASIC).
To achieve this intention, Part IIIA of the Act regulates the handling of personal information about individuals’ activities in relation to consumer credit. In particular, Part IIIA outlines:
- the types of personal information that credit providers can disclose to a credit reporting body (CRB), for the purpose of that information being included in an individual’s credit report;
- what entities can handle that information; and
- the purposes for which that information may be handled.
The Determination
In handing down his determination, Privacy Commissioner Timothy Pilgrim found that Veda had interfered with KB’s privacy by failing to keep accurate and up-to-date credit information about him, by using credit information that was false and misleading, and by failing to notify his credit providers in writing about the corrected information at [para 39]:
“The steps that Veda has indicated that it has in place to ensure the accuracy of credit information relating to judgments, in my view, place an undue burden on individuals to identify errors in their credit reports and draw these to Veda’s attention. In this case, both the complainant’s name and address did not match the information provided to Veda by the court. Once Veda became aware that neither the name or the address provided by the court were a match, it should have been on notice that further steps were required to confirm the accuracy of the information it had collected.”
Outcome
Veda was ordered to pay KB $15,000 in compensation and provide him with a written apology. The Privacy Commissioner also ordered that the company initiate a review into how it collected and used court proceedings to inform its credit reporting.
Corrective action taken by Veda
A spokesman for Veda said that in a “very small number of instances” errors could occur in their data matching processes. He also commented that the company:
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Sources:
Credit agency Veda ordered to pay business owner $15,000 after accidentally recording a $7000 debt on the wrong file - smartcompany.com.au
'A slight typographical error': how one false credit report turned into a nightmare - the guardian.com
Credit Reporting - oic.gov.au
'KB' and Veda Advantage Information Services and Solutions Ltd [2016] AICmr 81 (25 November 2016)
