ARCA supports OAIC's independent review of the Credit Reporting Code
Melbourne, 20 September 2022: The Australian Retail Credit Association (ARCA) welcomes the findings of the Office of the Australian Information Commissioner’s (OAIC) review of the Privacy (Credit Reporting) Code, the CR Code, following a thorough consultation to address the current needs of consumers and industry stakeholders.
The review has highlighted the role that credit reporting plays is ‘fundamental to a functioning economy’, and the importance of appropriate protections for how consumer’s credit information is handled. Alongside these protections, the review has emphasised the need to support consumer education and awareness about the importance of credit reporting and credit health.
ARCA has been code developer for the CR Code since 2014, which has meant ARCA drafted the CR Code and subsequent variations, all of which has been approved by the Information Commissioner. This CR Code is independently reviewed every four years and major reviews are vital and intended to reflect the changing credit reporting landscape as well as aligning with current government and community expectations.
ARCA’s Chief Executive Officer, Elsa Markula, is delighted by the recognition afforded to ARCA as code developer but also the important role ARCA has played in driving improvements to support the credit reporting system, and in providing consumer education through the CreditSmart website.
“We are pleased that the review has reinforced ARCA’s role as Code Developer and the deep expertise that ARCA has demonstrated in performing this role. Credit reporting is vitally important to the Australian economy, and ensuring the system reflects changes in the broader financial services landscape is essential.
“Of course, the credit reporting system works best when consumers understand it, know what their rights are, and how they can enforce these rights. We see CreditSmart as playing a critical role in this space. CreditSmart provides consumer friendly information about credit reporting. It is no surprise that the reviewer found that CreditSmart should continue and, indeed, that the OAIC ought to partner with CreditSmart. We encourage industry and regulators to use CreditSmart to support consumers who are looking to learn more about their credit health. CreditSmart also builds on that basic understanding through targeted information about particular areas, such as the CreditSmart financial hardship hub,” Ms Markula said.
During the consultation period, ARCA sought to address a number of issues within the code, across key areas including participation of new entrants such as telcos and utilities and buy now pay later providers, as a means of ensuring that the Code is fit for purpose and safeguarding both consumer and industry interests.
Noting the outcomes of the report, Ms Markula also flagged two areas of focus for ARCA moving forward.
“Firstly, in the area of domestic abuse, we want to build on our previous work in this area to ensure that the credit reporting system responds appropriately to the experiences of victims and victim survivors. We are encouraged by the recognition of ARCA’s work to date and look forward to the development of further principles to guide industry conduct.”
“And secondly, we welcome the proposal to introduce a framework for ‘soft enquiries’, a key area of consumer reform, which will enable consumers to shop around to understand the pricing of credit products, without any record being made on their credit report. These changes will bring about greater consumer choice and bring Australia in line with overseas counterparts, including Australia and New Zealand,” Ms Markula said.
CreditSmart is an information website (www.creditsmart.org.au) created and supported by credit experts to help consumers understand how credit reporting operates in Australia. It aims to help consumers take control of their credit health and understand how recent credit reporting reforms affect them, by providing information about the system that is unbiased and fair.
The CreditSmart website is owned by the Australian Retail Credit Association (ARCA), which is the peak body for organisations involved in the disclosure, exchange, and application of credit reporting data in Australia. ARCA’s members are the most significant credit providers and credit reporting bodies (CRBs), including the four major banks, specialist consumer finance companies, mutuals and marketplace lenders.