Submission: Proposed Principles of Reciprocity and Data Exchange
The Consumer Action Law Centre, Financial Rights Legal Centre and Financial Counselling Australia have made a joint submission to the Australian Competition and Consumer Commission (ACCC) on the likely public benefits and effect on competition of the Australian Retail Credit Association’s (ARCA) proposed Principles of Reciprocity and Data Exchange (PRDE).
Our organisations have for many years expressed concerns about the impact of comprehensive credit reporting (CCR) on consumers. However, the legislature by enacting CCR has indicated that it considers such a regime beneficial despite these concerns. In our view, it seems that the CCR regime cannot be effective unless there is an element of reciprocity, as demonstrated by the lack of industry participation in CCR to date.
We acknowledge that there are some benefits of the PRDE. At the very least it is a positive step towards having a single source of free credit reports for consumers, and it is likely to improve consistency in data reporting and competition amongst credit reporting bodies (CRBs). However, we wish to provide some alternate views on a number of the other public benefits articulated in ARCA’s application. In our view, CCR may be detrimental to consumers, particularly those who are financially excluded and marginalised, meaning transparency and enforceability of any reciprocity arrangement is imperative.
Our key concerns are that the PRDE does not resolve the critical problem of consistency in treatment of hardship variations on credit reports, and that the proposed PRDE may interfere with legitimate settlement negotiations that relate to the listing of credit defaults.
A full copy of our submission is available by here.
