Credit firms under fire over charges
A lawyer is challenging credit reporting bureaux to explain inconsistencies in the way they treat requests from consumers for their own credit information and why some charge fees for premium service when others provide it freely.
Christchurch privacy lawyer Kathryn Dalziel is questioning whether such credit reporting companies are meeting their legal obligations.
By law, the three bureaux operating in New Zealand must process people's requests for information free "as soon as practicable" and at latest within 20 working days.
One company gives people their files free in a day or two, while another appears to be taking three or four weeks unless people pay $30. The same company responds twice as quickly to such customer requests in Australia.
The third bureau charges $52 for quick turnaround, offers more information with paid than with free files, and requires free requests to be physically posted.
Free access is under the spotlight because the privacy commissioner and consumer advocates are urging everyone to get a copy of their file from each bureau at least once a year - an exercise that would cost at least $80 if fees are applied.
Files are also about to grow bigger because banks, telcos and other companies have started collecting consumers' total credit limits and tracking whether we pay bills on time.
Checking a file means consumers can correct any mistakes and avoid a possible shock from finding negative information when applying for credit, a mortgage, a cellphone contract or when changing power companies.
But the change has exposed a schism in the way bureaux handle free requests.
All bureaux sell people's information to companies which benefit from judging a person's credit-worthiness, such as banks and telcos. However, two bureaux also sell people's own information back to them, offering added services and increased speed to fee-paying requests.
Companies are allowed to charge a "reasonable" fee to cover costs if people want their files within five working days. But Dalziel questions why there would be a long lag between processing paid requests, which takes a day, and processing free requests.
"The goal is ‘as soon as practicable', not 20 working days. If it can practicably be provided within, say, six working days, then that is the goal."
Free files from Veda usually take about a week but may be longer depending on workloads.
Dun and Bradstreet could not answer how long free requests usually took. However, a request by the Sunday Star-Times in March took 17 working days.
In Australia the maximum time for the company's free service is 10 working days.
Veda and Dun and Bradstreet prominently promote paid options on their websites.
Veda's consumer webpage features a package giving access to your file within one business day and a year's email alert service for $59.95. Quick access to your file alone costs $51.95.
At the bottom of the same page Veda says people can get a free copy "within twenty working days". Unlike the $52 version, free files cannot be requested online and do not include a person's credit score.
Dun and Bradstreet's site features a range of paid options, including a credit report within one business day for $30.
Under the $30 option it tells people they can see a free copy online in 20 working days.
Asked whether the page should be re-worded lest people think it would always take a month, contradicting the "as soon as practicable" requirement, a Dun and Bradstreet spokesman said people often wanted files urgently and the "wording ensures there is no confusion about the possible length of delivery time".
Dalziel said telling people free access could only be provided in 20 days was misleading unless the bureau could show access could only practicably be provided in that time.
That would surprise her, "given that if someone pays a fee they can get it almost immediately and one company seems to think it can be provided within 10 working days".
That company is Centrix, which tells people the outer limit is 10 days and never charges people for access to their own files. It processes most requests free in one or two days.
Centrix executive director Mark Rowley said requests could take longer than 48 hours if staff were busy. But extracting a file from the electronic systems was "fairly instant" once someone's identity had been checked by staff.
"Any delay is usually from the method of sending back - for example, if someone wants it by mail."
A decade ago the privacy commissioner dropped a push to chop the outer limit for processing requests for personal information to 15 days, after the plan failed to gain support from the Law Commission.
Rowley and Veda managing director John Roberts defended keeping the 20-day limit, saying workloads could spike at any time, especially now that people were being encouraged to order their files.
Roberts said the fee for urgent requests covered quickly assigning a staff member to process them first.
Asked whether 20 days was too long, and whether people may feel pushed to pay, Assistant Privacy Commissioner Blair Stewart said it was commendable if some companies were processing requests in a week or less.
He hoped people would not feel they had to pay because the free option should be "quite satisfactory".
His office is advising people to check their files regularly before they need them.
Anyone who thinks the charge to see their file is unreasonable can complain to the privacy commissioner.
- Sunday Star Times