The Federal Government has introduced a major update to the Credit Reporting Code, promising strengthened privacy protections for Australian consumers’ credit information and greater clarity for industry on their obligations.

The revised code – Privacy (Credit Reporting) Code 2024 (Version 3.0) – sees the implementation of 15 proposals raised in the Office of the Australian Information Commissioner’s (OAIC’s) 2021 independent review.

Among the concerns flagged in the 2021 review by industry stakeholders included difficulties for consumers in correcting erroneous credit information, issues with accessing credit reports, insufficient support for credit fraud victims, ambiguity around how newer fintechs – notably BNPLs – are regulated under the existing rules, and the overall complexity of the current code, among a slew of other concerns.

Among the updated protections for consumers in the revised code include:

• improvements to explanatory materials providing clearer explanations of credit rules
• increased support for victims of fraud; individuals, for instance, can extend a ban on their credit report with “minimal evidence”
• a free alert system for victims of fraud who have placed a ban on their credit report, providing a notification to these individuals if a credit request is made during the ban period
• the ability to correct in one request, multiple pieces of incorrect information on an individual’s credit report caused by a fraud event
• the recognition of domestic abuse as a circumstance beyond an individual’s control that can lead to corrections needing to be made to their credit report
• greater transparency over how credit reporting bodies and banks comply with their privacy obligations.

Among the promised improvements for industry stakeholders include:

• enhanced usability of the Credit Reporting Code and explanatory materials, ensuring congruity with other legislative instruments
• a new and improved explanatory statement, including provision-by-provision explanations, practical guidance and examples to help industry understand and comply with its obligations
• further information around the definition of a reporting ‘month’ to help industry comply and input information into their systems
• changes to the ‘account close’ date definition to ensure consistency and certainty when businesses are calculating this to report consumer credit liability information
• transitional periods to enable time to update systems before compliance is required.

“The Credit Reporting Code sets out strict rules about how credit providers and credit reporting bodies must handle Australians’ credit information,” said Privacy Commissioner Carly Kind.

“The enhancements provided by the new Credit Reporting Code will help industry to meet their obligations and, in doing so, increase the trust and confidence of the Australian community in how their information is being used and disclosed,” Kind said.

She added: “It is critical that credit information is handled with care and the right balance is struck between credit providers’ need to access credit information and making sure Australians’ privacy is protected.”