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Applause For Proposed Changed To Credit Reporting Code

Applause For Proposed Changed To Credit Reporting Code

AUCKLAND, 17 May 2011 –

Veda Advantage applauds the announcement of a further change to the Credit Reporting Privacy Code 2004 which will provide a radical step-up in the ability of credit providers to assess risk and predict the behaviour of people seeking credit.

Managing Director John Roberts says the Privacy Commissioner's Amendment No 5 delivers a key tool to banks and finance companies and will improve the credit reporting system in New Zealand.

"This reform will quietly underpin the economy as it climbs out of recession. Lenders will be more confident in lending money when they have been able to make more thorough assessments of a borrowers' ability to pay. It also means they will have the knowledge of a borrowers' history so they can lend responsibly," Mr Roberts says.

The Office of the Privacy Commissioner (OPC) this morning revealed the detail of proposed Amendment No 5 to the Code which Commissioner Marie Shroff describes as "a package of reforms intended to cater both to the reasonable needs of the credit industry and reasonable privacy expectations of consumers."

Mr Roberts agrees with the balance achieved by the Privacy Commissioner and her team.

The Amendment will allow credit reporters to collect and report 'repayment history information' from credit providers. Provisions in the amendment detail that it will only be externally regulated credit providers including banks, telcos, utilities and registered insurers which will have access to this data.
It means details of an individuals' repayment history on credit cards, mortgage payments, and other types of credit can now be included in credit reports and credit scores for those eligible to receive this information.

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Mr Roberts says this will allow credit providers to obtain a better insight and understanding of an applicants' ability to repay credit they seek. It will support responsible lending by banks and finance companies and could lead to more competitive interest rates for consumers.

"This is a major development for the credit industry which will benefit consumers enormously. I congratulate the Privacy Commissioner on this provision," Mr Roberts says.

Veda supports all the directions taken in Amendment No 5, particularly the consumer safeguards provided and the $100 limitation on defaults which can be loaded.

Mr Roberts also notes that the Privacy Commissioner has recognised the issue of identity fraud.

"The provision to enable consumers to freeze their credit reports if they are a victim of fraud reflects the world we live in. This is in terms of the increasing incidence of identity fraud and in the critical importance credit reports play in the 21st century financial lives of most New Zealanders."

Veda Advantage is pleased the provisions today reflect the direction flagged but yet to be promulgated in Australia.


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