Significant changes to Australian credit reporting have been implemented with amendments to the Privacy Act 1988 (Cth). There is new information available to some Credit Providers on Australian credit reports, and with this has also come an increased obligation for all Credit Providers to provide accurate, up-to-date and fair information on credit reports. There have been changes in the area of correction of credit reports which will make it easier for some Australians to correct inconsistencies. We look at the extensive information out there for consumers about the amended laws, and explain where your rights are enhanced, and where there still may be limitations to correcting some credit reports.
By Graham Doessel, Non-Legal Director of MyCRA Lawyers www.mycralawyers.com.au.
There are some changes with the new Privacy Laws which will make it easier for consumers to correct their credit report.
Four significant changes include:
1. The requirement of the Credit Provider to provide an individual with written notice if it refuses to correct the personal information as requested by the individual. The written notice must set out:
• the reason for refusal (unless this would be unreasonable);
• the mechanisms available to complain about the refusal; and
• any other matter prescribed by regulation.
2. The requirement of timeliness in answering a request to correct a credit report, so that a credit provider must respond to a request for correction within a reasonable period.
3. The right of the consumer to request that if an organisation refuses to make a correction, and an individual requests that a statement be attached to the record stating that the information is inaccurate, out-of-date, incomplete, irrelevant or misleading, the organisation generally needs to attach this statement in a way that will make the statement apparent to users of the information.
4. The requirement for any Credit Provider or Credit Reporting Bureau to correct a credit report, regardless of whether they are the entity which holds or is responsible for the information on your credit report.
To read more on our Privacy Laws, you may wish to see our recent post on Repayment History
Should I use a credit repairer?
You should be careful of ‘cheap and nasty’ credit repairers who promise to correct your credit report for a small fee, and who are not skilled paid advocates.
It’s important to know, that your Credit Provider will only make corrections in accordance with the Privacy Act 1988 (Cth). The information on your credit report must be inaccurate, out-of-date, incomplete or irrelevant or misleading to be removed from your credit report.
A skilled paid credit reporting advocate would offer much more to the individual than what they could do for themselves. But to get the best result, the company must spend the time to do it right. Often there is only one chance at getting that credit listing removed.
There are reports of people paying $1,000 for credit repair and being sent a ‘do it yourself’ kit. Spending hours on their own case when they thought they’d employed someone skilled in advocating for them. You can access information on how to address credit inconsistencies yourself, and each credit provider should also have a readily accessible correction policy on their website.
There are also reports of companies charging thousands of dollars who are not skilled paid advocates. These companies are doing nothing but referring the client’s case to the relevant industry Ombudsman. This is also something you can do yourself for free.
So if you can’t afford to employ a skilled credit reporting advocate, don’t go for ‘cheap and nasty’ credit repair. You should look at what you can do for yourself for free.
Why might I need or want a skilled paid advocate?
In our experience, there have been some limitations to consumers correcting their own credit report within the credit reporting system.
Here are a handful of reasons why you may find it necessary to employ an advocate to help correct your credit report:
• You may not have the time or patience to dispute your own case (on average we would devote about 28 working hours to each case of dispute).
• The case could be complicated and require someone more skilled.
• You may require an advocate to investigate your case more extensively before making a claim for dispute.
• Better knowledge of Privacy Law may be required in order to make the case clearly.
• You may not wish to deal directly with the Credit Provider or Credit Reporting Bureau – particularly where you believe the credit listing has been placed unfairly or is misleading, or where there is an ongoing dispute involved.
• Access to more avenues of investigation and dispute may be required than what an industry Ombudsman (as an impartial Body) can provide.
• You may simply want to ensure the most chance of success at getting your credit listing removed (especially since in many cases there is only one chance at correction).
• You may also feel you need or require a lawyer to advocate for you, especially if you are not eligible to use a credit legal centre. A lawyer can: Act in court processes including the removal of Judgment and Writ services, a non-lawyer cannot act in these proceedings; identify legal issues and give advice on these; prepare binding agreements, conduct formal negotiations and then follow through with enforcement where necessary; make formal recommendations to Credit Providers making reference to the law, and making representations on their client’s behalf.
Unfortunately when clients have already used another company or have done some of the work themselves, it can also place limitations on their case.
For instance, if you have already engaged the Ombudsman, it is virtually impossible for an advocate to then re-open your case with a different avenue of dispute or by including extra legislative proof to strengthen the case.
Some inferior companies can also leave an imprint on your credit file after they have done the work. This can be detrimental especially if you intend to apply for finance.
So what will be the future for credit reporting correction? Despite a set of better laws, we believe consumers will continue to need advocates focused on credit reporting law within the credit landscape, well into the future. Skilled paid advocates in the credit arena will be watching these new laws unfold, ready to put their hand up for consumers and test the new legislation for its effectiveness and fairness as it should be tested.
MyCRA Lawyers is a firm focused on credit file consultancy and credit disputes. MyCRA Lawyers mean business when it comes to helping those disadvantaged by credit rating mistakes.
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