Commercial credit providers (CCPs) may be required, by the
current Australian privacy laws, to join an external dispute
resolution (EDR) scheme (EDR scheme) by 12 March 2015 if they wish
to continue participating in credit reporting.
Significant privacy reforms commenced in March 2014. These
reforms required CCPs, who participate in credit reporting, to be a
member of an approved EDR scheme.
Due to practical issues in doing this, a regulation1
was made, suspending the requirement for CCPs to be members of an
approved EDR scheme until 12 March 2015. That date is now fast
The definition of 'credit provider' under the
Privacy Act 1988 (Cth) is broad and includes an
organisation or small business (supplier) that carries on a
business in the course of which the supplier defers payment for
goods or services for at least seven days.
Whether the exemption will continue, is being considered by the
Attorney General. While we understand that the Attorney
General's Department (AGD) has provided a report to the
Attorney General in relation to this issue, the Attorney General
has not yet considered that report. The AGD has indicated that the
matter will be resolved before the 12 March deadline.
This uncertainty places CCPs who participate in the credit
reporting system in a difficult timing position.
If the exemption lapses, CCPs, who are not members of an
approved EDR scheme, will not be able to obtain credit reports
from, or provide credit information to, credit reporting bodies
until they join an EDR scheme.
Both the Financial Ombudsman Service (FOS) and Credit and
Investments Ombudsman (CIO) (which was formerly known as the Credit
Ombudsman Ltd or COSL), are approved EDR schemes.
CIO is accepting memberships from CCPs. CIO made changes to its
rules last year to deal with this issue. The rules changes, amongst
other things, allow some CCPs to "comply with the new Privacy
Act requirements regarding EDR membership without having their
other (non-privacy-related) activities subject to COSL's (now
CIO's) jurisdiction" (see
It does not appear that FOS has made a similar rule change that
would also exclude non privacy activities from its
We recommend that commercial credit providers watch developments
in relation to this issue closely.
In the years following the global financial crisis of 2008 many Australian investors lost their life savings as financial products failed and the Australian Stock Exchange shed over 3,000 points.
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