A review by the Attorney-General’s Department of the arrangements in place to help people in financial hardship has prompted a proposed change to the Privacy Act
Announced by the Attorney-General, Christian Porter, the proposed change would allow potential lenders to people in financial difficulty find out whether their client had other debts with other lenders.
“Currently,” Mr Porter said, “due to provisions in the Privacy Act, when a person is engaged in a hardship arrangement with one credit provider, this arrangement cannot be disclosed to other credit providers.”
He said this had seen circumstances arise where people struggling to repay one debt were provided with another line of credit from a different provider.
“Proposed changes to the Privacy Act will make sensible changes to allow for transparent and responsible lending practices where people are subject to hardship arrangements,” Mr Porter said.
“The amendments will benefit consumers by making sure credit products are suitable, and ensuring consumers are encouraged to seek hardship arrangements if they are struggling to meet repayments under their credit contract.”
He said the draft legislation would enable public consultation on the proposed changes which would introduce a new category of information within credit reporting, enabling hardship information to be reported alongside repayment history information.
“Under the proposed changes, hardship indicators will identify where a hardship arrangement is in place and whether a consumer is making payments in accordance with that arrangement,” Mr Porter said.
“Hardship information will be subject to the same protections as repayment history information concerning collection, use and disclosure under the Privacy Act, but will be subject to a shorter retention period.”
He said the changes balanced the needs of both credit providers and consumers, giving credit providers relevant information about consumers who were in financial hardship, or had recently experienced hardship, in order to facilitate better and informed lending decisions.