ADDITIONAL COMMENTS BY
THE AUSTRALIAN GREENS
1.1
The
Australian Greens support the aims and objectives of the Privacy Amendment (Enhancing
Privacy Protection) Bill 2012 (the Bill), in particular the
unification of the National Privacy Principles and the Information Privacy
Principles into the new Australian Privacy Principles that apply to both
Commonwealth agencies and private sector organisations.
1.2
This Bill
amends the Privacy Act 1988 (Cth) (the Act) and has been developed
following numerous reviews and inquiries, which have included significant
consultations with stakeholders. However, as was pointed out during this
inquiry process, the reforms have been a long-time coming; for example, this is
the first major reform to credit reporting since its introduction in the 1990s.
1.3
While there
was majority support for the contents of this Bill amongst stakeholders, some
concerns were expressed that although this Bill did improve 'on the
current position, and that is because it is an important step towards that goal
of harmonisation and simplification' it could not necessarily be said 'that it
was an enhancement'.[1]
Indeed, three different stakeholders expressed some concerns that this Bill was
a 'missed opportunity' as it did not go far enough in either streamlining
provisions or providing consumers and citizens with better protections.[2]
1.4
Changes to
Australian law to modernise, strengthen and streamline privacy and credit reporting
provisions are important. In doing this, we need to be careful that we strike
the right balance between privacy rights and the free flow of information.
1.5
The
Australian Greens strongly support the strengthening of Australian law to
ensure enhanced compatibility with our obligations under international human
rights law. As a signatory to the International Covenant on Civil and Political
Rights (ICCPR), Australia has an obligation to promote and protect the right to
privacy. Article 17 of the ICCPR provides that:
1. No one shall be subjected to arbitrary or unlawful
interference with his privacy, family, home or correspondence, nor to unlawful
attacks on his honour and reputation.
2. Everyone has the right to the protection of the law
against such interference or attacks.
1.6
In signing up
to the ICCPR, Australia has agreed to take all necessary steps to respect,
protect and fulfil human rights.
1.7
We agree with
the findings and recommendations made by the Committee's Report and make
the following additional comments, which are directed at improving consumer
protection and privacy rights.
Repayment history
provisions
1.8
Firstly, we
agree with the objection to the repayment history provisions raised by the
Consumer Credit Legal Centre (NSW) Inc (CCLC NSW). As CCLC NSW highlighted, the
main reason for the repayment history provisions is that credit providers
require this information so that they can deal with managing risk, including
risk-based pricing. This will not result in positive outcomes for consumers as
it may cause some consumers, particularly low income and disadvantaged
consumers, to be faced with higher costs of credit.
1.9
The CCLC NSW
highlighted that there is insufficient evidence to show that more comprehensive
reporting will 'lead to decreased levels of over-indebtedness and lower credit
default rates'.[3]
Indeed, CCLC NSW contends that there is evidence that 'indebtedness increases
with the introduction of more comprehensive credit reporting'.[4]
Furthermore, CCLC NSW was very strongly opposed to the repayment history
provisions for a number of additional reasons, including: their potential to
entrench hardship; the lack of evidence to suggest that the current situation,
which does not provide for repayment history to be made available, is causing
any problems in the market; and, the likelihood they would lead to risk-based
pricing, which will entrench disadvantage by leading to a higher cost of credit
for those least able to afford it.[5]
1.10
The
Australian Greens are concerned that while the repayment history provisions may
benefit credit providers, they will not benefit vulnerable consumers and as a
result we query the necessity of inclusion of these provisions in the Bill. We recommend
that, in light of the evidence provided by consumer advocates, the Government
reconsider inclusion of the fifth dataset relating to repayment history. If the
Government decides to include more comprehensive credit reporting we are of the
view that the Government should consider introducing better consumer
protections to monitor and minimise the impact of this dataset, particularly so
that consumers experiencing socio-economic disadvantage and poverty are not
worse off. Various consumer advocates provided suggestions during the
inquiry about how to do this, and in addition to those submissions we say that
further thought should be given to better regulation and/or monitoring of
credit providers and how they deal with risk‑based pricing and its impact
on vulnerable consumers.
Definition of 'serious
credit infringement'
1.11
The
Australian Greens also agree with comments made by the Consumer Action Law
Centre (CALC), and supported by CCLC NSW, that the 'amendment to the definition
of 'serious credit infringement' at proposed section 6(1) will not address the
serious problems that this definition creates'.[6]
A serious credit infringement is, apart from bankruptcy, the most serious type
of listing that can be made and it will ordinarily remain on a credit report
for seven years. It is very significant and has substantial ramifications for
individuals. It is therefore essential that such listings are proportionate to
the type of credit infringement, and are accurate and based on clear evidence.
1.12
CALC
expressed concerns with the amendment to the Bill that requires that a serious
credit infringement cannot be listed unless six months has elapsed since the
credit provider last had contact with the debtor. It appears that the intent of
this change is to ensure that credit providers attempt to make contact with the
debtor so as to avoid an incorrect listing. By its intent, the amendment seeks
to enhance consumer protections. However, as CALC points out, there is no
guarantee that this amendment will achieve its purported aim as the credit
provider is not required to be proactive and attempt to make contact; the only
requirement is that the credit provider waits six months before listing a
serious credit infringement.
1.13
CALC referred
to a previous submission by consumer advocates that the definition of 'serious
credit infringement' should be replaced with two new definitions:
'un-contactable default' and a 'never paid' flag. CALC indicated that this
would be 'a more effective and proportionate response'[7]
and would involve the 'never paid' flag being removed after six months and
converted to an 'un-contactable default'. Under an 'un-contactable default', if
at any point the debtor contacts the creditor, this is re‑categorised to
a standard default. While we understand that a previous inquiry highlighted
that this suggestion does not take into account the serious nature of
intentional credit fraud, we say that further consideration should be given to
improving this definition to encapsulate better consumer protections as
suggested by CALC. If the Government feels that it is necessary to retain a
listing that reflects the serious nature of intentional fraud, it could
consider a system that allows for a 'fraudulent conduct' flag where there is
clear and compelling documentary evidence, or conduct has been found to be
fraudulent by a court of law.[8]
Timing of default
listings
1.14
In relation
to proposed paragraph 6Q(1), the Australian Greens are of the view that a
default listing should not occur until at least 30 days after a default notice
has been given. In practical terms, this gives a borrower sufficient time to
receive the notice (which may be subject to the vagaries of the post), contact
the credit provider and/or try to rectify a default before a listing can be
made, and is consistent with other credit laws. This recommendation was made by
the CCLC NSW. The submission of the Australian Communications Consumer Action
Network also suggested that a listing should not occur until the credit
provider has made 'reasonable attempts' to contact the debtor and provided a 'specific
warning' regarding the default listing.[9]
'Determinations' by the
Australian Privacy Commissioner
1.15
Finally, we
note significant concerns raised by the Australian Privacy Foundation (APF) and
CCLC NSW regarding the lack of determinations that have been made under section
52 of the Act. As a result of this
history, the APF is apprehensive about the effectiveness of new reform under
section 96, which provides 'a right of appeal to the Administrative Appeals
Tribunal against decisions by the Commissioner to make a 'determination' of a
complaint under s 52(1) or (1A)'.[10]
In its view, 'this new right of appeal is of little use unless complainants can
require the Commissioner to make formal decisions under'[11]
section 52 of the Act, and it recommends that:
The Privacy Commissioner should be required to make a
determination under s52 wherever a complainant so requests, and for
complainants to be informed that they are entitled to such a formal resolution
of their complaint.[12]
1.16
The
Australian Law Reform Commission (ALRC) in its Report 108: For your
information – Australian privacy law and practice made a similar
recommendation in 2009.
1.17
The Office of
the Australian Information Commissioner (OAIC) provided a supplementary
submission to the inquiry and noted that the Government had specifically
rejected the recommendation of the ALRC in 2009 on the ground that as an
independent statutory officer the OAIC 'should be responsible for exercising
the administrative decision making powers under the Privacy Act'.[13]
While we understand the tension here, and the importance of promoting and
respecting the independence of the OAIC, we believe it would be prudent for the
Government to reconsider this matter and conduct a review of the functions and
powers of the OAIC in relation to its system for managing complaints,
conciliations and determinations.
Recommendation 1
1.18
The
Government should reconsider inclusion of the fifth dataset relating to
repayment history. If the Government decides to include more comprehensive
credit reporting, it should also consider what additional consumer protections
are necessary to monitor and minimise the impact of this dataset.
Recommendation 2
1.19
Further
consideration should be given to improving the definition of 'serious credit
infringement' with a view to enhancing consumer protections as suggested by
CALC. If the Government is of the view that it is necessary to retain a listing
that reflects the serious nature of intentional fraud, it should consider a
system that allows for a 'fraudulent conduct' flag where there is clear and
compelling documentary evidence, or conduct has been found to be fraudulent by
a court of law.
Recommendation 3
1.20
Twelve
months after the enactment of this Bill, the Government should conduct a review
as to the effectiveness of the OAIC's system for managing complaints,
conciliations and determinations.
Recommendation 4
1.21
Proposed
new subsection 6Q(1) should be amended so as to require an appropriate amount
of time, of at least 30 days, to have elapsed from the date that written notice
is given before a default listing is made.
Senator Penny Wright
Australian Greens
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