Brokers had seen borrowers’ funding cut off for “insubstantial reasons”
A huge win has been secured for mortgage brokers across the country after the Australian Information Commissioner approved a variation to the Privacy (Credit Reporting) Code 2014 (the CR Code) to come into effect 14 February.
According to one executive, brokers will be rejoicing over the news as the current code saw tens of thousands of Australians have their credit rating destroyed and their businesses and financial security put in jeopardy due to civil court actions over their credit rating.
Such civil actions led to a great deal of frustration for mortgage brokers, who watched on as clients had their banking funding cut off for ambiguous and insubstantial reasons.
MyCRA Lawyers chief executive officer Graham Doesell said the firm started campaigning to the Privacy Commissioner in 2017 to have this detrimental and harmful misreading of the rules changed.
“Now only judgements can be recorded on someone’s credit file and those judgements must relate to credit to impact someone’s credit rating,” he said.
“We’ve had a client with a business employing 120 staff almost sent to the wall because of a trivial dispute with their pool repair man over $3000 that never even went to court.”
Doesell said other common weaponised civil disputes are ex-business partners suing simply to dry up funding.
“The system was so crazy even abandoned claims would remain on a people’s credit file for years,” he said.
“We made a submission to the Price Waterhouse Cooper’s ‘Three Year Review’ of the CR Code.
“The 32-page submission detailed how civil claims were being used to vexatiously impact someone’s credit files even when the court case had no chance of success. It’s a victory for common sense.
“The system still isn’t perfect with people able to impact someone’s credit file simply by making credit enquiries in their name, but we are now headed in the right direction.”
The new legislation which is scheduled to be implemented next month will mean people with a civil court action that isn’t a result of a judgement and isn’t credit related should be removed.
