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Creditor CRA access

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Creditor CRA access

Postby caffiene » Wed Jan 13, 2016 4:23 pm

I have been advised by an expert that creditors have always had the right to inspect debtors credit files without consent as a matter of standard practice.
He said this regardless of whether or not the borrower is informed that his credit file will be searched as part of the t&cs of the credit agreement.

My view was that legitimate interests would not by themselves permit processing unless the processing was fair and lawful in the first place.

If the creditor fails to mention in the agreement that the borrowers credit file will be accessed if he signs up for the loan it seems unfair to then do credit checks without consent. It is a requirement for fair processing that a notice is issued at an early stage to inform the data subject of the purposes in advance.

The expert said they never used to give these notices and that it has only recently become unusual to not issue a notice or get consent.

There must be a reason the expert is right and I am not?
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Re: Creditor CRA access

Postby dls » Wed Jan 13, 2016 7:58 pm

The whole credit reference system seems to me to stink.

Even so, your expert has it right.

The creditor only has to have declared this as one of its activities and to process it fairly within the principles. A debtor creditor arrangement can give rise to continuing checks and decision making. I am not at all clear why such checks should not be proper.

I would be mildly happier if you were right, but I cannot see that you are.
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Re: Creditor CRA access

Postby caffiene » Wed Jan 13, 2016 8:37 pm

I had not considered the ICO registration. So basically, as long as they include a few lines about credit assessment and fraud prevention with CRAs in their ICO notification they are complying with the DPA.

So an elderly lady with no computer, unaware of the DPA and unaware of how to search the ICO register applies for credit and the application form / t&cs makes no mention of credit checks. So, she is signing up under the assumption there will be no credit checks. This later turns out to be untrue. Is there an argument that by failing to mention credit checks in the t&cs the customer has been misled?

Schedule 2 says when considering fairness, regard must be had as to whether the data subject was deceived or misled.

The customer supplied their name, address, etc thinking there would be no credit checks, is it still fair to process?

I am not disagreeing with you, it seems the expert knew his stuff but perhaps there are circumstances where a vague ICO registration is not enough?

You are right. It stinks. The only way is for someone to create an ethical CRA as the DPA does more harm than good.
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Re: Creditor CRA access

Postby Smouldering Stoat » Wed Jan 13, 2016 9:13 pm

A Fair Processing Notice need not contain information that the data subject ought already to expect (the ICO gives the example of a mobile phone company not needing to tell customers that their data will be used for billing purposes). The use of Credit Reference Agencies is so widespread that I think it would be a struggle to argue that customers wouldn't expect them to be used. Indeed these days they seem to be telling people when an Agency won't be used.

It is clear that the processing is necessary for the legitimate interests of the lender, so one of the conditions of Schedule 2 is met, which is all that is required. I don't disagree with you about the nature about these agencies, though.
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Re: Creditor CRA access

Postby caffiene » Thu Jan 14, 2016 9:05 pm

It's one thing to say customers should expect it, but not all customers are even numerate nevermind aware.
What if it is not a lender but a water company or council tax? These are recent interpretations of 'creditor'.

Surely all the particular circumstances should be weighed up to decide what is fair? I agree they would probably get away with it but surely it is better for the lender to get consent?

I think that a partial data processing notice could raise issues. What if the notice in the t&c's mentions defaulters will be reported to CRAs but does not mention credit checks? The reader may assume that only the things specifically mentioned will occur.
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Re: Creditor CRA access

Postby atticus » Thu Jan 14, 2016 9:40 pm

A creditor is someone to whom money is owed by a debtor.
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Re: Creditor CRA access

Postby caffiene » Mon Jan 18, 2016 10:33 pm

atticus wrote:A creditor is someone to whom money is owed by a debtor.


I agree, but I can find nothing in the legislation that prevents any supplier of services paid for in arrears from sharing data with CRAs.

The document:

"Data Protection Technical Guidance
Filing defaults with credit reference agencies
" by the ICO says:

"For the purposes of this guidance the term ‘lender’ may include companies which extend credit without
making loans, for example, a telecoms company or utility".


I suspose 'lender' has a wider meaning than 'creditor' but they could also use the word 'supplier'.

The addition of water and utilities to CRA records is very recent. Even landlords are now considered 'lenders' as they too can report rent payments. I don't think this was originally intended when CRAs were introduced. The clue is in the title credit reference agency
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Re: Creditor CRA access

Postby atticus » Tue Jan 19, 2016 2:38 pm

You know how I said that a creditor is someone to whom money is owed by a debtor? Well, that applies to everyone you have described: suppliers paid in arrear; landlords; utility companies; telecoms companies; lenders. Unless payment is made for services in cash at the time the service is provided, then money is owed. The person who owes money is a debtor and the person to whom he owes money is his creditor.
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Re: Creditor CRA access

Postby caffiene » Tue Jan 19, 2016 10:06 pm

It would also apply to hairdressers, taxis, restaurants and ladies of the night.

It comes down to what the majority of society wants. Most people want easy credit and lenders want to minimise risk.

However, CRAs give creditors power to punish debtors at will, preventing debtors from exercising their rights.

If the supplier does not supply as agreed, the debtor cannot elect to withhold payment without risking damage to his credit record. Is that fair?
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Re: Creditor CRA access

Postby dls » Wed Jan 20, 2016 11:48 am

You exaggerate the powers of the CRA's. I wiould wish to be a long way back in any queue to defend them, but you have data protection law to assist you in making sure that their records are relatively accurate.
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