Australia: Privacy law update - draft Credit Reporting Code

Financial Services Alert
Last Updated: 24 April 2013
Article by James Stewart
Focus: Australasian Retail Credit Association's draft Credit Reporting Code
Services: Financial Services
Industry Focus: Financial Services


Less than two weeks remain for credit providers to provide their comments on the draft Credit Reporting Code (CR Code) to its creator, the Australasian Retail Credit Association (ARCA).

Once approved by the Office of the Australian Information Commissioner (OAIC), the CR Code will replace the existing Credit Reporting Code of Conduct that has operated since 1996, and will form part of the privacy protection regime set out in Part IIIA of the Commonwealth Privacy Act 1988 as amended in December 2012.

The CR Code will take effect on 12 March 2014 along with other major reforms to the Privacy Act.

Submissions on the CR Code will be accepted by ARCA until 5 May 2013. Late submissions will not be considered unless prior arrangements have been made with ARCA.

Key features of the CR Code

The CR Code is designed to supplement and clarify obligations under the new Part IIIA of the Privacy Act. It is intended to be binding on all credit reporting bodies (CRBs) and Credit Providers (CPs) as well as affected information recipients (other persons who are entitled to receive disclosure of information about credit in certain circumstances set out in the Privacy Act e.g. mortgage insurers and trade insurers).

The CR Code is not voluntary and will have regulatory force. Breaches of the CR Code will be considered a breach of the Privacy Act and can attract penalties of up to $1.7 million.

Key features of the CR Code include:

  • additional disclosures required to be made by CPs to individuals when collecting personal information
  • changes to complaints handling procedures for CPs and CRBs
  • CPs and CRBs must be a member of a recognised external dispute resolution scheme
  • additional rules about an individual's right to access and correct their credit reporting information or eligibility information
  • restrictions on CPs from providing information to CRBs when an individual has submitted a hardship application to a CP
  • CRBs will be obliged to audit the compliance of CPs to ensure they are complying with their Part IIIA obligations
  • individuals will be granted a 5 day grace period before CPs can report a missed repayment on an individual's credit history to a CRB
  • prescribed details of what must be included in the notice of refusal of credit given by CPs to individuals
  • additional restrictions on when CPs can request credit reporting information from CRBs.


In December 2012, OAIC requested ARCA to develop the CR Code and to apply to the OAIC for its registration.

ARCA have set out in their CR Code consultation paper that the draft code has been prepared with the aim of providing the OAIC with a Code that represents a 'balanced' approach – meeting the reasonable expectations of industry, of consumers and of the regulator – rather than an industry preferred position.

ARCA states that the CR Code has been designed to:

  • address expectations in Part IIIA or the Explanatory Memorandum
  • replicate current Credit Reporting Code of Conduct obligations that continue to be relevant given that this Code will be replaced by the CR Code
  • make credit reporting work from a practical perspective
  • provide some assistance to individuals to understand and interact with the new systems
  • address industry uncertainty as to how to interpret aspects of Part IIIA in the interests of consistency of approach within industry.

The CR Code does not encompass all aspects of Part IIIA and so compliance with the CR Code alone will not achieve full compliance with Part IIIA.

Timeline for finalising the CR Code

The OAIC requires the draft CR Code to be submitted for approval by 1 July 2013.

The table below sets out the current timetable for the finalisation of the CR Code:

5 April Draft CR Code released for public consultation
5 May Submissions due on public consultation
31 May Analysis of issues and redrafting completed by ARCA
4 June ARCA Board meeting - to consider redrafted CR Code
5 June - 12 June Refine draft CR Code in light of ARCA Board decisions
19 June Final review of draft CR Code
1 July Lodge draft CR Code and application with OAIC
15 July Release detailed Explanatory Notes for public consultation
August / September Finalised Explanatory Notes provided to OAIC

Going forward

Credit providers will need to review current processes and procedures to ensure that the changes to be brought about by the CR Code are actioned appropriately within their organisation. The CR Code is a key component of the reforms and it will be critical for credit providers to consider the CR Code in detail, when it is ultimately finalised by ARCA and approved by the OAIC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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