Response to the consultation on sharing of non-consensual data - 13 February 2008
BERR has now published a response to the consultation on the sharing of non consensual data. The result of which is that Government considers that the outcome is not yet conclusive and has set up a working group to further investigate and report on the issue within the next year, and hopefully sooner.
Experian welcomes the publication of this response although it is disappointing that no conclusion has been reached despite the considerable amount of evidence that was supplied and the importance of the issue, particularly in the current economic climate.
Experian is represented on the working group and is keen to ensure that an informed an pragmatic outcome is reached in order that the UK consumer credit industry may continue to develop new and better decision systems to better identify and assist those consumers already or in danger of becoming in difficulty.
Experian response to the DTI consultation on the sharing of non consensual data - 4 January 2007
The Executive Summary
The UK has the most effective credit regime in the world according to the World Bank's Doing Business website, based on the balance of protections for lenders and consumers and the breadth and depth of information available at the credit bureaux.
Good credit systems ensure that available funds are directed to the best propositions and that default is minimised. One of the reasons for the success of the UK is the highly effective credit bureaux system.
The DTI s Overindebtedness Taskforce recommended greater credit data sharing. Since then lenders have made significant advances in making more data available. By the middle of 2007 all the data that can legally be shared will be on the credit bureaux databases. The only missing information will be that information that may not be made available because the account holder was not notified at the time of opening of the intention to share data. Without exception, were the consumers to open an account with these lenders today, their data would be shared.
Good credit decisions need the fullest information possible of a consumers indebtedness to be available in order that lenders may make decisions to make credit or continue to make credit available in the most responsible way possible. Evidence shows that access to bureaux data is the most effective way of obtaining data.
There are other beneficiaries too because whilst the main and most high profile beneficiaries of this proposal are the relatively small (c90,000) but very important number of consumers that will now be identifiable as worthy of closer examination, there are others that will also be positively effected. These are the consumers that do not use credit but who apply for other financial products for which Prevention of Money Laundering checks must be carried out. Up to 25% of applicants for savings and investment products are likely to be positively assisted in this way.
Access to the data will still controlled and protected as the information may only then be extracted from those databases with the agreement and knowledge of the consumer themselves.
Experian recommends that Option 4 should be adopted which is that regulation should enable the sharing of non-consensual accounts without an expressed opt-out for consumers. The importance of the data and the undue effort required for a limited number of consumers render the suggestion of an opt out unattractive.
Download the full response transcript (pdf) »
Experian outlines position on DTI consultation — 19 October 2006
Since this debate first surfaced over two years ago Experian has been very clear in our position and actually submitted our comments to the Department of Constitutional Affairs when they were reviewing the work of the Information Commissioner in 2004.
Experian considers that it would not be practical for lenders to try to obtain retrospective positive consent i.e. expecting the borrower to return some form of agreement to having their data shared. From the broad public interest argument we consider that a notification, for example with a monthly statement, should be sufficient in such cases and indeed the DPA already recognises that consent is only one of the ways for making processing of personal data 'fair and lawful'. There is a strong argument for saying that it is in the legitimate interests of the lender for these data to be shared and against the increasing concerns around indebtedness this notification (rather than positive consent) is proportionate.
We also fully support the controls around data sharing in the UK and are working with SCOR on their current compliance process.
DTI publishes consultation on sharing of non-consensual data sharing — 11 October 2006
The DTI has published the consultation document on the sharing of data on accounts that were opened before lenders included "fair obtaining clauses" on their application forms. In some cases the accounts will have been opened even before the first Data Protection Act in 1986. It is calculated that over 40m accounts are currently not shared with credit reference agencies for this reason, despite the fact that the lenders concerned have been sharing more recently opened accounts.
More information will be made available shortly to assist potential responders to this consultation which closes 11 January 2007.
Documentation can be downloaded from the DTI website.
Disclaimer: The information contained on this webpage is provided for general guidance only. It is not intended to provide you with professional advice nor is it intended to substitute you obtaining professional advice.
