Veda Advantage Information Services and Solutions Ltd (Veda) is being forced to refund thousands of consumers who paid to obtain credit reports under Veda’s expedited delivery deal, according to a decision handed down today by the Australian Privacy Commissioner. The Commissioner found that Veda breached a series of privacy rules when they:
- charged for “expedited delivery” of a credit report where the consumer had not sought access to a credit report in the previous 12 months;
- failed to prominently state on its websites that consumers have a right to obtain their credit reporting information free of charge;
- did not take reasonable steps on its websites and phone line to ensure that the option of free access to a credit report was as available and easy to identify as access to paid credit reports; and
- used personal information it held on consumers for the purposes of direct marketing in breach of privacy rules.
The decision follows a series of complaints lodged in late 2014 by the Financial Rights Legal Centre, Consumer Action Law Centre, Financial Counselling Australia and the Australian Privacy Foundation.
“This is a big win for consumers who simply want free access to their credit report as is their entitlement under the law,” said Kat Lane, Financial Rights Legal Centre Acting Coordinator. “The Privacy Commissioner has confirmed that consumers are entitled to a free report and gaming of the system to advantage the commercial interests of credit reporting agencies is not allowed.”
Under credit reporting laws that came into effect in early 2014, credit reporting agencies like Veda must provide access to a free credit report to all Australians once every twelve months (and in some additional circumstances). Credit reporting agencies must also make accessing the free report as easy as getting a paid report. There are also requirements about the use of consumers’ personal information for marketing, the content of free reports, and the timeframes in which reports must be provided to consumers.
“Veda set up their websites and phone service in such a way as to drive consumers towards paying for their credit reports,” said Gerard Brody, CEO of Consumer Action. “The Privacy Commissioner has agreed and while Veda has already taken some steps to improve their communications, Veda will need to take further action to make it right. We call on any and all consumers impacted by this decision to contact Veda as soon as possible to receive your refund.”
“’Free means free—not $69.95 for faster access,” said Fiona Guthrie, CEO Financial Counselling Australia. “This is both sensitive and critical financial information that all consumers need to access from time to time. It’s our own information and we have every right to be able to access it without having to pay an arm and a leg for the privilege.”
A small number of further allegations were not upheld by the commissioner. These related to
- Veda not including ‘Vedascore’ information in free reports: the Commissioner found that the Veda Score was not information ‘held’ by Veda, rather it is dynamically generated at the point of application;
- Veda not providing the credit report within 10 days: the Commissioner found that there was no evidence of a systemic problem rather the incident complained of was a singular breach;
- Veda charging for credit reports when a consumer hadn’t received a free report: The Commissioner found that if a consumer has had the opportunity to choose a free credit report but chooses a paid report in the hope for additional value, then this is not a breach; and
- Veda excessively charging for credit reports after a free report has been provided: The commissioner found that there was not enough information to know whether $79.95 is excessive.
The consumer organisations are considering appealing some or all of these findings.
Ms Lane stated: “While we are disappointed with the findings on these points, the central principles hold: consumers are entitled to a free credit report and credit reporting agencies can’t manipulate the system for their own commercial advantage. We expect the Privacy Commissioner to oversee both Veda’s refund process and implementing the required changes to their phone service and websites.”
The full determination can be found on the Office of the Australian Information Commissioner Website.
For further information contact Drew MacRae, Policy and Advocacy Officer, Financial Rights Legal Centre on 0404 604 978 or firstname.lastname@example.org
About Financial Rights
The Financial Rights Legal Centre is a community legal centre that specialises in helping consumer’s understand and enforce their financial rights, especially low income and otherwise marginalised or vulnerable consumers. We provide free and independent financial counselling, legal advice and representation to individuals about a broad range of financial issues. We operate the Insurance Law Service which provides advice nationally to consumers about insurance claims and debts to insurance companies. Financial Rights also operates the National Debt Helpline, which helps NSW consumers experiencing financial difficulties. Financial Rights took over 26,000 calls for advice or assistance during the 2015/2016 financial year.
About Consumer Action
Consumer Action Law Centre is an independent, not-for profit consumer organisation based in Melbourne. We work to advance fairness in consumer markets, particularly for disadvantaged and vulnerable consumers, through financial counselling, legal advice and representation, and policy work and campaigns. Delivering assistance services to Victorian consumers, we have a national reach through our deep expertise in consumer law and policy and direct knowledge of the consumer experience of modern markets.
About Financial Counselling Australia
Financial Counselling Australia is the peak body for financial counsellors. Financial counsellors assist people experiencing financial difficulty by providing information, support and advocacy. Working in not-for-profit community organisations, financial counselling services are free, independent and confidential
About the Australian Privacy Foundation
The Australian Privacy Foundation is the primary association dedicated to protecting the privacy rights of Australians. The Foundation aims to focus public attention on emerging issues which pose a threat to the freedom and privacy of Australians. The Foundation has led the fight to defend the right of individuals to control their personal information and to be free of excessive intrusions.