Law Society suggests an “opt-in” credit reporting scheme
The New Zealand Law Society suggests an "opt-in" reporting scheme as an alternative to the proposed changes to the Credit Reporting Privacy Code.
The proposal by the Privacy Commissioner is to extend of the scope of credit reporting to include non-default information, to allow more information to be collected about New Zealanders' borrowing.
It is anticipated that the availability of more detailed information, particularly the rounding out of the default-based records currently available, will assist in improving the quality of credit services.
In a response to the Commissioner’s “Draft Amendment No 5 to the Credit Reporting Code”, the Society acknowledges the potential for benefit to individual consumers, but suggests that adopting an opt-in reporting scheme is a preferable approach as it is one based on individual consent (with the prospect of withdrawal of consent as a safeguard).
It says that consumers who perceive a benefit in reporting of their information or are otherwise unconcerned would opt to have their information reported, while others would remain unaffected.
This, the Society says, would provide reassurance to the public as a whole, as well as an opportunity to identify the benefits, and possible risks or complications, of the extended scope of reporting.
It would also create an incentive to credit providers to ensure that the anticipated benefits eventuate and are communicated to consumers, and to refrain from unwelcome use of information that has been provided.
The Society comments that the relative benefits of opting-in, or the disadvantages of not doing so, may prove sufficiently substantial in practice that opting-in becomes the norm or that a comprehensive scheme without an opt-in provision could then follow.
This submission was prepared with assistance from the Law Society’s Human Rights and Privacy Committee.