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Many New Zealand businesses have made submissions on the Proposed Credit Information Privacy Code, which was released for public consultation by the New Zealand Privacy Commission in July this year. The Proposed Code seeks to address general concerns about the protection of individuals’ privacy rights in the credit information industry.
Due to the large number of submissions already received by the Privacy Commissioner and the fact that submissions are still being received, the Commissioner has indicated that she will now arrange to meet with submitters to conduct follow-up consultation in the New Year. The proposed commencement date of February 2004 will not be met, and the Privacy Commissioner believes that it is unlikely that the Proposed Code will come into force before the middle of 2004, at the earliest.
BCA makes submission
Baycorp Advantage has made its own submission, in which we assert that the existing privacy protections in the Privacy Act already sufficiently protect the integrity and privacy of individuals in virtually all cases. We suggest that before imposing a code, the Privacy Commissioner should undertake empirical research. This would determine whether there are any privacy concerns that the Privacy Act does not meet and how privacy can be further enhanced without being outweighed by a significant cost to consumers, the credit industry and the New Zealand economy as a whole.
The key points to our submission are as follows:
- Restricting information collection and release
We are concerned that the Proposed Code may take away the individual’s right to authorise collection of certain types of personal information held about them and to authorise its disclosure to certain organisations. The Proposed Code limits access to credit information held by credit reporters and restricts the types of information that credit reporters can collect.
- Expropriation of valuable private property
We are concerned that the Proposed Code would require Baycorp Advantage and our customers to divulge valuable intellectual property, such as data-matching algorithms and credit score information, to clients, consumers and potential competitors.
- Compliance issues
We have suggested that the Commissioner consider a phased implementation of any final Code over a two-year period, to allow organisations in the credit industry to make the necessary changes to their practices to comply with the Code. Baycorp Advantage has also suggested that any Code should include an expiry or review date to ensure that businesses can maintain their flexibility given the fast-paced nature of the credit industry.
- Detrimental impact of the Proposed Code on consumers and New Zealand economy
We suggest that introducing the Proposed Code in its current form would not increase the protection of personal information privacy as intended. Instead, it will impose significant costs on New Zealand businesses and consumers, particularly consumers with low incomes and assets. These costs will include less availability and a higher cost of credit, and make accessing key information required to assess commercial risk more difficult for businesses. Together with the fact that compliance costs will also be incurred and passed on where possible, this means that any benefits would likely be outweighed by the increased costs imposed on businesses and consumers.
Baycorp Advantage is looking forward to making oral submissions to the Privacy Commissioner next year and to further explore suggestions we made to ensure that any Code complements the way the credit information industry operates. In the meantime, we are in the process of investigating the concept of industry self-regulation with representatives of our clients, as an alternative to any code of practice. Should you have any further queries, please contact your local account manager.
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