Credit reporting changes for all New Zealanders - ID Fraudsters to be stopped in their tracks
Media Release on changes to credit reporting system, effective from 1 April 2012.
30 March 2012
Major changes to the credit reporting system come into force this Sunday, 1 April 2012. The first change to the law allows a "positive" credit reporting system to operate in New Zealand.
Up until now, New Zealand has run a negative credit reporting system that recorded defaults, bankruptcies and court judgments.
"Credit reporters will now be able to gather and share much more financial information about people. This should bring benefits to both consumers and the industry, but it will also mean that credit reporting affects the lives of more New Zealanders than before,” Privacy Commissioner Marie Shroff noted.
Another major change to the law will strengthen existing consumer protections and create new protections for people.
From today, New Zealanders will have the right to "freeze" their own credit report. Consumers can ask a credit reporter to freeze their credit report if they are at risk of identity fraud.
“This important new right will limit the real financial harm and stress that can result from identity fraud and enable people to protect themselves."
"A freeze on the consumer’s credit report will help to stop a fraudster from opening new credit in that consumer’s name. It may also alert credit providers to the possibility that a fraudster is at work,” said Ms Shroff.
The Office of the Privacy Commissioner has released a set of fact sheets to help consumers navigate the credit freezing process and determine when a “freeze” might benefit them.
Other changes from 1 April 2012 include:
• Credit reporters will be prohibited from listing small defaults of less than $100 – traditionally an area of consumer dispute;
• Credit providers may use credit reports to “pre-screen” direct marketing lists - to help ensure that marketing for new credit products is responsible and not sent to those who cannot afford more debt; and
• Credit reporters will be required to send annual compliance reviews to the Privacy Commissioner - to encourage systematic improvements to procedures to safeguard credit information and to maintain public confidence in the system.
“During this time of change in credit reporting practice, I expect to see credit reporters and credit providers helping consumers to understand the new credit reporting practices and their various rights," Ms Shroff commented.
See www.privacy.org.nz for all other Credit Reporting Privacy Code material.
For further information contact: Annabel Fordham 021 509 735 or 04 474 7590.
Notes for editors:
1. The Credit Reporting Privacy Code 2004 is issued by the Privacy Commissioner under the Privacy Act 1993. It controls the practices of credit reporting agencies. Amongst other things, the code limits the information that may be disclosed by credit reporters; who may access credit reporting databases, and provides retention periods for credit information held by credit reporters.
2. These changes were brought about by Amendment No 4 and 5 to the Code, issued in December 2010 and September 2011 respectively, but both commencing on 1 April 2012. Additional details of the changes are included in supporting information papers and FAQs released in relation to those amendments.