Baycorp warned of unfair edge

The Commerce Commission has issued credit assessment agency Baycorp Advantage with a formal warning for potentially anti-competitive behaviour.

The warning dates back to October 2001 when Baycorp introduced a $5 fee - payable by independent debt collectors when they loaded default information into Baycorp's credit reporting database.

At the time the fee was introduced Baycorp operated the only credit reporting database, as well as operating a debt collection business in competition with independent debt collectors. Independent debt collectors would ordinarily load information into the database, increasing the likelihood that an outstanding debt would be repaid.

The introduction of the fee had the effect of deterring debt collectors from loading information into the database, giving Baycorp's own debt-collection business a competitive advantage.

The commission's view was that the introduction of the fee was a prima facie breach of S36 of the Commerce Act and warned Baycorp of this view.

In 2004, Baycorp advised the commission that it had put in a waiver scheme, allowing debt collectors to load default information for free.

The commission decided to limit the action to a warning after Baycorp introduced the waiver.