Credit Reports with Mistakes
We asked 58 subscribers to get a copy of their Baycorp report. Eight were told no report was recorded for them. If no new information has been added to your report in the last seven years you usually don’t have one. Fifty received a report, of which 39 had credit information recorded, while the others only contained personal details.
34% of the 50 found one or more mistakes in their report. A clear majority of these (84%) were mistakes in personal details, such as a wrong licence number, wrongly spelled name or street name, addresses recorded they hadn’t lived at, wrong date of birth and misspelled or wrong employment details.
Baycorp told us this information is usually entered directly by the credit providers. If one lender enters details that are slightly different from information already in the report, such as differences in spelling, Baycorp doesn’t have systems in place that automatically flag this as a potential mistake that needs to be corrected.
The mistakes found could lead to ‘mismatching’: your bank may receive the wrong person’s report, or other people’s information could be listed on your report.
One such case was reported by the Office of the Federal Privacy Commissioner. The credit reporting company (not named in the report) cross-referenced 19 ‘aliases’ to this consumer’s report, implying he was committing fraud by obtaining credit using pseudonyms. Only after the consumer complained to the OFPC was his report cleared. The aliases belonged to a criminal who had recently been released from prison on fraud charges and who had a similar name.
Over 1.5 million default listings
The most widely used credit reporting company in Australia is Baycorp Advantage, formerly known as Credit Advantage and prior to that as Credit Reference Association of Australia. It holds reports on 13 million Australians, 1.5 million of which contain defaults. The Tasmanian collection service holds 400,000 reports, about 25% of which contain adverse information.
A new entrant is Dun and Bradstreet, which opened its consumer database in July 2002.
All three are private companies, and they all also have debt collection businesses. As the Telecommunications Industry Ombudsman (TIO), John Pinnock, says: “If you’re chasing debt and control the credit reference system, this is an inherent conflict of interest.” Debt collectors can use the credit reporting system as a tool, telling consumers they will be default-listed by their credit provider if they don’t pay up.
The Privacy Act allows traditional credit providers such as banks to access these databases. The Office of the Federal Privacy Commissioner (OFPC), which regulates credit reporting, interprets the Act in a way that gives phone and utilities companies access. The OFPC has also determined that any company can access credit reporting if it allows customers seven days or more to pay. This includes retailers, companies that rent out goods such as video stores, and service providers like legal and healthcare professionals.
While there are some consumer protection measures in the current law, they aren’t stringent enough. For example, there isn’t a minimum listing amount — some companies list defaults of as little as $50.
This article was last reviewed February 2004.