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Prohibition on bundled consents and other changes in credit reporting law

Fuseworks Media
Fuseworks Media

Credit reporting companies will be prohibited from using arrangements with related companies for the purposes of direct marketing, under new changes to the Credit Reporting Privacy Code.

Privacy Commissioner John Edwards today announced an amendment to the Code to give effect to the recommendations of an 18-month review of the operation of New Zealand’s comprehensive credit reporting system.

Mr Edwards says new provisions strengthen enforcement by closing loopholes that might allow credit reporters to bypass requirements by using related companies and consents bundled into application processes or by arrangements with other agencies.

For example, when an individual makes a request for their credit information, a credit reporter would now be prohibited from using that process to obtain consent to disclose identifying information to a third party such as an insurer, debt collector or credit broker. The change gives effect to the review report recommendation that makes clearer the prohibition of any use of credit information by a credit reporter ‘to facilitate marketing’.

"Credit reporters are not permitted to use arrangements with related companies to circumvent the Code or to make uses or disclosures of credit information that would breach the Code. Furthermore, credit reporters must not take requests by individuals to exercise rights of access, correction or suppression as an opportunity to cross-sell products or seek consent to marketing, debt collection or any other unrelated purposes."

In addition, Mr Edwards says the amendment to the Code will strengthen the rights of New Zealanders to get access to their credit reports and credit scores quickly and for free. It will also help ensure that individuals at risk of identity fraud can exercise their rights to get a credit freeze across all three national credit reports more quickly.

"The changes to the Code also seek to ensure that consumers shopping around for the best credit deal will not be penalised in the calculation of credit scores. In another significant initiative of benefit to both consumers and businesses, the amendment will allow the credit reporting system to be used, in a safe and controlled way, to help trace former customers with whom businesses have lost touch in order to enable the return of money still owed to those former customers."

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