New Privacy Regulations Exempt Commercial Credit Providers from EDR

7 March 2014
Practice Groups:
Consumer Financial
New Privacy Regulations Exempt Commercial
Credit Providers from EDR
By Andrea Beatty, Cameron Abbott and Jason Vongratsavai
Transactions and
Commercial credit providers and utilities are not required to join a recognised external
dispute resolution scheme to participate in credit reporting until 12 March 2015.
The Attorney-General has released regulations - Privacy Amendment (External Dispute
Resolution Scheme - Transitional) Regulation 2014 (Privacy Amendment (EDR)
Regulation) suspending the requirement for commercial credit providers and utilities to be
members of an external dispute resolution (EDR) scheme for 12 months.
Amendments to the Privacy Act 1988 (Cth) (Privacy Act) by the Privacy Amendment
(Enhancing Privacy Protection) Act 2012 (Cth), coming into force on 12 March 2014,
require credit providers to be a member of an EDR scheme to be able to disclose credit
information about individuals to a credit reporting body. From 12 March 2014, the Privacy
Act will include a broad definition of credit providers that includes both consumer and
commercial credit providers. This means that commercial credit providers and utilities will
be caught within the new credit reporting regime. Prior to the new regulations, those
commercial credit providers would have needed to be a member of an EDR scheme
recognised by the Australian Information Commissioner (Commissioner).
In effect, commercial credit providers and utilities would need to be a member of a
recognised EDR scheme in order to:
 disclose credit information about an individual (which includes identification
information) to a credit reporting body
 collect credit reporting information about an individual.
The Privacy Amendment (EDR) Regulation exempts commercial credit providers and
utilities from this requirement until 12 March 2015.
For utilities, all states and territories have EDR schemes in place that apply to utilities
operating in their jurisdiction. However, not all utility EDR schemes are able to be
recognised by the Commissioner. For example, a utility EDR scheme's jurisdiction might
be limited to exercising powers in performance of its state or territory based function. The
Attorney-General anticipates that, given the additional time, these hurdles for schemes to
obtain EDR recognition from the Commissioner will be removed.
In relation to commercial credit providers, the Explanatory Statement to the Privacy
Amendment (EDR) Regulation provides that:
it is the clear policy intention to bring commercial credit providers within the scope
of EDR obligations to the extent that they access consumer credit reporting
New Privacy Regulations Exempt Commercial Credit Providers from EDR
some stakeholders have argued that commercial credit providers should be
exempt from EDR obligations as, aside from obtaining credit reporting
information, they do not otherwise participate in the credit reporting environment
some commercial credit providers may instead choose not to access credit
reporting information when making their lending decision which in turn may also
reduce the overall availability of credit.
In view of this, the Attorney-General has provided another 12 months for a solution to be
Issues for Commercial Credit Providers
Commercial credit providers should watch this space as it appears the Attorney-General
contemplates that a solution in which commercial credit providers will be required to be
members of EDR schemes is the way forward. In the meantime, commercial credit
providers and utilities should continue to assess their initial and ongoing compliance with
other obligations under Part IIIA (relating to credit reporting), the Credit Reporting Privacy
Code and the Australian Privacy Principles.
Andrea Beatty
Cam eron Abbott
Jason Vongratsavai
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