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[1996] PrivLawPRpr 71
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Greenleaf, Graham --- "Reports and submissions" [1996] PrivLawPRpr 71; (1996) 3(8) Privacy Law & Policy Reporter 153
Reports and submissions
PRIVACY COMMISSIONER REJECTS `POSITIVE' CREDIT REPORTING
Financial System Enquiry Discussion Paper (Cth), November 1996 (Wallis
Inquiry)
Privacy Commissioner (Cth) -- Submission to the Financial System Enquiry,
January 1997
The Wallis Inquiry's Discussion Paper in Chapter 8 `Consumer Protection' says
the Enquiry will examine two issues:
-
What principles should guide any extension of the privacy regime?
- Which regulator should be responsible for administering privacy protection
in the financial sector?
The Privacy Commissioner's submission is unambiguous in its answers:
-
It is important that universal privacy standards apply across the private
sector.
- As envisaged in the Attorney-General's Discussion Paper on extending the
Privacy Act to the private sector, the Privacy Commissioner would be the
`final arbiter', where necessary, on privacy complaints, but `disputes
would
first be addressed at the local level by the organisation concerned, or by an
industry ombudsman where one exists (for example,
the existing Banking Industry
Ombudsman)'.
The Wallis Inquiry's Discussion Paper also notes in passing two proposals by
financial institutions to Wallis, which the Privacy
Commissioner's submission
rejects as subverting the basic elements of information privacy.
A
number of submissions to Wallis, including by Westpac, have suggested that Pt
IIIA of the Privacy Act should be amended to allow `positive' credit reporting. `Positive' reporting was proposed
in the late 1980s by the Credit Reference
Association of Australia (CRAA), and
would have involved all financial institutions which send reports to CRAA
sending monthly reports
on the payment performance of all their credit
customers, whether or not those customers were currently or ever had been in
default on a loan. This proposal for continuous disclosure and surveillance
of the financial affairs of a large percentage of the Australian population
(which Wallis rather limply describes as `reporting good credit behaviour') was
effectively stopped at the Australian Privacy Foundation's
`summit meeting' on
credit reporting, at which the Commonwealth Attorney-General and the Minister
for Consumer Affairs jointly announced
that `positive reporting' would be
banned, and the rest of credit reporting practices brought under the Privacy
Act for good measure. The 1990 credit reporting amendments were the
eventual result.
The Privacy Commissioner's submission says that high level of intrusion into
the affairs of the majority of non-defaulting Australians
in order to attempt
to minimise the level of default `is hard to justify'. `This mass surveillance
was rejected by Federal Parliament
in 1989 in passing the credit reporting
amendments to the Privacy Act. Nothing has changed in the last eight
years to make this major privacy intrusion any more acceptable now than it was
then', according
to Acting Privacy Commissioner Nigel Waters. Community
expectations of privacy are not consistent with such a change, the submission
says.
Other
companies, including the ANZ Banking Group and the AMP Society, would like to
be able to swap marketing and credit information
on customers within the
different companies in their groups, enabling them to build detailed customer
profiles and engage in cross-selling
of products. This is at present prohibited
by Pt IIIA of the Privacy Act 1988, at least in relation to credit
reports, unless the consent of the customer is first obtained. AMP, for
example, would like the `opt
in' approach of customer consent to be reversed to
one where customers had to take the initiative to `opt out' from disclosures to
other parts of AMP. Inertia would limit the number who do.
The Privacy Commissioner's submission says that allowing credit reports to be
used for marketing `directly cuts across the letter
and intent of Pt IIIA', and
the more general question of using other personal information collected by one
entity for the marketing purposes of a related
entity `is at the crux of
privacy concerns'. The Commissioner considers that `unless they are advised to
the contrary, it is fair
to say that most customers who have entered into a
relationship with one entity of a corporate group are unlikely to be aware of
the breadth of corporate activities carried out by the group'.
It
is clear that major elements of the finance industry would like to use Wallis
to reverse most of the key privacy protections of
the 1990 credit reporting
amendments. CRAA is as yet keeping silent, no doubt influenced by the fact that
it made such a disaster
of leading the campaign for positive reporting last
time. Whether the credit industry is preparing for a united push to reverse
financial
privacy, or whether its views are fragmented, is not yet clear.
The extent to which the proposed private sector extensions to the Privacy
Act preserve the level of financial privacy in Pt IIIA will be one of the
principle `litmus tests' of whether the new Commonwealth government intends to
protect privacy or subvert it.
The Privacy Commissioner's approach to Wallis
indicates an intention to guard this important public interest.
Graham Greenleaf, General Editor.
Maggie Hickie (Leader of the Opposition, Territory Labor) Protection from
the Misuse of Personal Information (Discussion Paper, October
1996)
The NT Labor Party's Discussion Paper indicates that they favour legislation to
implement information privacy principles (IPPs),
but includes few specific
commitments other than the following:
-
to protect `information held on medical records and electoral rolls which has
been a source of concern in recent times';
- a limit on the use of information to the purpose for which it was
collected;
- an emphasis on `jointly developed Codes of Conduct rather than penalties and
sanctions'; and
- an office of `Information Ombudsman' to report directly to the Parliament,
with `power to issue enforcement notices' requiring compliance
with IPPs,
possibly to also be responsible for appeals against FOI decisions.
The Discussion Paper says the legislation should cover `all record holders in
the NT Government's operations with a limited power
to exclude by regulation'.
Copies or details may be obtained from Mark Nelson, Legal Adviser, Office of the Opposition Leader, NT Government, ph: (08) 8999 3883
Comment
The NT Opposition paper coincides with the Government's development of an
options paper (see <3 PLPR 100>). It also shows how debased the word
`Ombudsman' has become -- enforcement powers and hearing appeals are
antithetical to the
original concept of an ombudsman as someone who can
investigate, recommend, conciliate, persuade, publicise, and that's all (the
NSW Privacy Committee, for example). NT Labor is really recommending an
Information and Privacy Commissioner with enforcement powers,
as it should in
the 1990s.
Graham Greenleaf, General Editor.
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