Views on credit ratings sought

Individuals will more easily find out what credit information is being kept about them and be able to correct it under a proposed Credit Information Privacy Code.

Privacy Commissioner Bruce Slane, who released the proposed code, is calling for public submissions within the next two months.

Mr Slane said the draft code was drawn up after discussion with the industry over a long period.

The code sets out how the privacy principles apply to credit activities, including what information may be collected, the uses to which it can be put and rules for access by the people being report on, and others.

"Credit reporting agencies play an important and legitimate function in consumer credit," Mr Slane said.

"However, their activities also intrude into privacy and individuals can be harmed when things go wrong."

The code placed special emphasis on ensuring information in credit reporting systems was accurate and reliable.

It also sought to promote transparency and to ensure that consumers were in a position to know what was going on and what information was being stored about them.

An information paper about the code said inaccuracies in information could "result in real harm to particular individuals".

Complaints about credit reporters to the Privacy Commissioner were consistently among the top 10 types of complaints he received.

A survey carried out on behalf of the commissioner found 64 per cent of respondents were concerned about privacy of personal details held for credit reporting, while 41 per cent were very concerned.

Credit reporting involves a private company that individuals do not have direct access to. The survey found that 89 per cent of respondents were concerned if a business that they did not know about could get hold of their personal information. A total of 78 per cent were very concerned.

"One key approach of the code is to require transparency so that the individual concerned may act as an "auditor of information," the information paper said.

The code proposed that where a credit report was used in a credit decision, the person should be able to get a copy of the credit report free of charge, and people should be able to access information about themselves from a credit reporter for free.

"Removing charges as a barrier to access will facilitate one of the prime means of improving accuracy, which is to encourage individuals to check their credit report from time to time and bring any inaccuracy to the attention of the credit reporter," the information paper said.

Other suggestions in the code include:

* Restricting the access to a credit reporting database to credit providers.

* Credit information for debt collection simply be handled through the credit provider.

* Extensive information should only be held about individuals who have failed to meet their credit obligations, rather than acting as a "Doomsday Book" of the financial affairs of all New Zealanders.

* Setting out specific classes of information that may be collected by a credit reporter, and timeframes for how long information may be retained and disclosed to credit providers.

* Security safeguards to be taken against misuse by those with authorised access to credit information.

It was also hoped the code would help dispute resolution and complaints handling.

- NZPA