Peter A Clarke

The credit reporting provisiosns and protections incorporated into the Privacy Act in December 2012 and taking effect on 12 March 2014 are designed to provide real and detailed controls on the use and disclosure of credit information and improve the accuracy of data collected by credti reporting agency. This was part of the trade off of credit reporting agencies being able to collect significantly more credit information relating to an individual than was previously the case.

There has been little reported regulatory activity regarding the crediit reporting agencies though the anecdotal complaints about the accuracy of data continues.   The 7.30 program last night showed that there remains problems with compliance.  The program Veda Advantage accused of providing incorrect credit information and refusing to fix errors provides:

LEIGH SALES, PRESENTER: You’ve probably never heard of a company called Veda Advantage, but there’s a good chance it knows a lot about you. It’s Australia’s biggest credit reporting bureau and it keeps a detailed file on every Australian who’s ever taken out a loan, a credit card or signed up for a phone or utility service.

The trouble is it appears this information is sometimes sold to third parties, and what’s more, errors and misleading information regularly creep onto consumers’ permanent credit records, often with disastrous consequences.

Pat McGrath has the story.

PAT MCGRATH, REPORTER: Shellharbour on the New South Wales coast is the type of place people dream about, a place where seachangers come to buy their own small slice of coastal paradise.

One of those dreamers was Ann Nguyen.

ANN NGUYEN: This is a nice place, people friendly and the weather is nice and very community-minded people.

PAT MCGRATH: Two years ago, Anne found a modest unit at Shellharbour and set her heart on moving her family there. But when she went to the bank for a loan, she got a nasty surprise.

ANN NGUYEN: I was shock and I was upset and angry at the same time.

PAT MCGRATH: The bank said no. She had an unpaid debt on her credit report, compiled for the bank by Veda Advantage. But Anne soon discovered the black mark against her name belonged to somebody else.

ANN NGUYEN: My full name Thi Hong Hanh Nguyen and the person that didn’t pay their debt Thi (H**n) Nguyen, so only three name – three letter …

PAT MCGRATH: But a completely different person.

ANN NGUYEN: Different – like, completely different person, yeah.

PAT MCGRATH: Even after Anne showed Veda evidence the debt wasn’t hers, the company refused her plea to fix its mistake straight away. They said she’d have to wait 30 days.

ANN NGUYEN: And I said that I don’t have 30 day because I need my loan to fully approve so I can get the house.

PAT MCGRATH: Luckily, Anne was able to strike a deal with the owners of the house to wait a month. After weeks of stress and worry, her mortgage finally came through.

So did Veda ever explain how this ended up on your file?

ANN NGUYEN: They don’t explain. They didn’t explain at all to me.

PAT MCGRATH: Did they apologise?

ANN NGUYEN: No, they don’t. They didn’t, yeah.

PAT MCGRATH: Veda Advantage is Australia’s biggest credit reporting agency. It proudly declares that it holds files on about 20 million people. Every time you apply for a loan, a credit card, a utility or a phone and every time you don’t repay your debts, Veda and its rivals put it on your record. But all too often, they make mistakes.

KATHERINE LANE, FINANCIAL RIGHTS LEGAL CENTRE: I think the biggest problem we have in Australia is the accuracy of the information on people’s credit reports.

PAT MCGRATH: Katherine Lane regularly speaks with clients who say they’ve been denied credit because of mistakes on their credit reports.

KATHERINE LANE: I find that Veda is very poor at dispute resolution. They’re supposed to have an extremely rigorous process in place where they test the evidence to make sure that that listing is accurate. And if they’re not doing that, their dispute resolution process is a fail. Everybody in Australia who’s an adult is entitled to check their credit report for free once every year.

PAT MCGRATH: So, I decided to check my own. OK, well I’ve just sent off my application for my free credit report, so in 10 days I’ll receive a copy in the mail from Veda, hopefully with a whole lot of accurate information about my credit history.

Well here it is and there’s actually some information missing on this report that I thought would be in there, but the information that is there does appear to be accurate, which really makes me one of the lucky ones. In fact a report by the Information Commissioner three years ago found that almost a third of people’s credit histories contained incorrect information.

TIMOTHY PILGRIM, PRIVACY COMMISSIONER: There’s an obligation on all credit reporting bodies to ensure that their information is correct.

PAT MCGRATH: Every year, Australia’s Privacy Commissioner Timothy Pilgrim receives about 500 complaints about credit reporting agencies and what they’re doing with our private financial data.

One of those complaints being looked into right now has come from Kylie Miller. She believes Veda sold her confidential information to other financial companies so they could target her with marketing material offering more credit. Not surprisingly, she’s become protective about her privacy.

KYLIE MILLER: I mean, all of my tax records, all of the invoices, everything goes into the shredder and actually I use the shreddings in the chook pen. Nothing’s wasted.

PAT MCGRATH: Last year, Kylie refinanced the mortgage on her home in Gippsland in eastern Victoria. Soon after, she started receiving offers of loans and credit cards from other banks, not her lender. So, she rang each of the companies involved to find out how they got her name and address and her search led her to Veda.

KYLIE MILLER: They have a separate side business called Inivio which actually sells all your personal information to finance companies and other interested parties through these commercial arrangements such as the one that they presumably had with ANZ and the other finance companies that I was getting mail from.

INIVIO EMPLOYEE (Inivio promo video): At Inivio, we’ve been collecting data for a very long time, so we have information on over I think 16 million Australian consumers and two million businesses.

KYLIE MILLER: Pretty much, they have everything. All of these companies have whatever you’ve ever put out anywhere, filled in anywhere. They have it, they keep it, they share it and they sell it. And to me, it just seems like this gross invasion of privacy.

TIMOTHY PILGRIM: There are strict provisions that restrict those organisations from being able to use that information for direct marketing purposes. It’s just not allowed under the Privacy Act.

PAT MCGRATH: Veda Advantage declined to be interviewed for this story and wouldn’t answer questions about Anne Nguyen or Kylie Miller. In a statement, Veda told 7.30 that it operates within the Privacy Act and that mistakes are dealt with in a strict time limit. Regarding Inivio, the company says it respects Australia’s privacy principles and uses information where consent is provided either directly or by a third party.

KYLIE MILLER: I guess the thing that surprises me is that the law actually allows a company which is not by law allowed to sell your credit information to own a company and operate a company that exists for the pure purpose of selling your information. It seems to me to be pretty unethical, even if it’s legal.

PAT MCGRATH: Now, all our credit information with Veda belongs to a foreign company. Veda Advantage was bought by the US-based massive credit reporting multinational Equifax for $2.5 billion early this year.

KATHERINE LANE: Equifax is an enormous credit reporting agency in the United States and in UK. There are tonnes of millions of inaccurate credit reports in the US, even by conservative standards. It’s probably millions and millions and millions, you know. And as a consequence, the inaccurate information just – it devastates people’s lives.

PAT MCGRATH: Kylie Miller is now waiting to find out exactly what happened to her personal information and like all Australians, she has no control over whether what Veda is saying about her is true.

KYLIE MILLER: I feel like Alice and I’ve fallen down this rabbit hole into this murky underworld of data and information and privacy and it just feels like Big Brother knows everything I do.

LEIGH SALES: Pat McGrath with that report. And since we posted that story online today, we’ve had many people contact us about their experiences. If you have something to tell us, please get in touch via the 7.30 website or our Facebook page.