The damning rulings issued recently against Australia's monopoly provider of personal credit information provided a timely reminder of the need for independent regulation as well as highlighting the tendency for businesses holding personal data to put profit before trust.
Veda Group, taken over last year by US credit information company Equifax, was hit with four regulatory determinations for breaches of privacy laws in mid-December last year.
Australian privacy commissioner Timothy Pilgrim found Veda interfered with the privacy of individuals seeking to access a free copy of their credit report. The dodgy activity by Veda dates back to 2014 when privacy laws changed.
Veda's database of credit information about individuals and corporations is mainly used to determine creditworthiness.
The information the company holds is used by financial institutions in deciding whether to grant or withhold credit.
Credit reports are becoming increasingly important for Australians seeking to borrow money or trying to manage their debts. The higher your credit score the more likely you are to get a better deal on a loan.
Credit reports are of growing importance to emerging businesses trying to compete with the major banks such as peer-to-peer lenders.
Pilgrim found that Veda, which has a database of 16.5 million credit active Australians, was guilty of what Chanticleer calls marketing trickery.
This involves the structuring and presentation of online information to trick people into doing things they would not do if they had been treated with openness and honesty.
Fortunately, four consumer advocacy groups - the Financial Rights Legal Centre, the Consumer Action Law Centre, Financial Counselling Australia and the Australian Privacy Foundation – were on the case and took complaints to the Office of the Australian Information Commissioner.
Privacy Commissioner Pilgrim investigated and then issued four damming determinations in relation to breaches of the Privacy Act.
He found that Veda failed to prominently state that individuals have a right to obtain their credit reporting information free of charge in certain circumstances.
He found that Veda failed to take reasonable steps to ensure that free access to credit reports was as available and as easy to identify and access as paid access to credit reports.
He found Veda used and disclosed personal information it held about individuals seeking free access to credit reports for the purpose of direct marketing in breach of Australian Privacy Principle 7.
He found that Veda charged for the "expedited delivery" of a credit report in breach of section 20R (5) of the Privacy Act, in circumstances where the individual (or access seeker) had not sought access to credit reporting information within the preceding 12-month period.
Pilgrim did note that, to its credit, Veda had taken some steps to improve the promotion and delivery of its free service of access to credit reports since the complaints were lodged.
In a statement issued to The Australian Financial Review Veda said it "worked to help Australians understand their credit history as an important aspect of managing their financial health. We have made it easier than ever to access Veda credit reports with over 250,000 Australians accessing a freeVeda credit report each year. "
"While we are always taking feedback and improving our site, in 2014 some consumer advocates made several complaints to the OAIC about access to Veda credit reports.
"The OAIC made a determination in relation to these complaints and published its Determination on 15 December 2016.
"For a number of the complaints, there were no adverse findings against Veda, and the OAIC's determination recognised that over recent years Veda has been making improvements to its website."
The company said it would be taking action in relation to two complaints.
"Within six months we will enable phone requests for free credit files, in the same way as may be made for premium products," Veda said.
"Customers who purchased a $69.95 MyCreditFile express credit report on or after 12 March 2014 may be eligible for a refund - Veda will be alerting eligible customers."
