The Complaint
The Complainant entered into a debt restructuring agreement (“the 2003 Agreement”) with the Bank with respect to two bank accounts he had opened at the bank in 2003. The Complainant could not repay the monthly amount as required, and the debt restructuring agreement failed. In 2006, the Complainant made a monthly repayment agreement (the “2006 Agreement”) with the Bank over the phone, and thereafter made repayment accordingly.
A few years later, the Complainant obtained his personal credit report from TransUnion Limited (“TransUnion”), and he found that the Bank (i) had not provided to TransUnion the information about the 2003 Agreement and the 2006 Agreement; and (ii) had reported inconsistent information about the number of days past due (including 30 days and 1 day) to TransUnion regarding one of the bank accounts.
The Bank explained that after it made the 2003 Agreement with the Complainant, it had regularly reported the repayment records of the Complainant to TransUnion. However at that time the Bank’s system did not support the reporting of debt repayment arrangement (including Individual Voluntary Arrangement) between the Bank and its clients, and therefore it did not notify TransUnion of the information about the 2003 Agreement. Furthermore, the Bank considered that the 2006 Agreement was a verbal agreement made over the phone, other than a formal debt arrangement so that it did not notify TransUnion of the related information.
Moreover, the Bank claimed that after it made an Individual Voluntary Arrangement with a client, it would write off the payment in default in his account. Since TransUnion set the number of days past due for a write-off account should not equal to “0”, the Bank reported the minimum number of days past due to be “1 day” until the client settled all the amounts in default. The Bank explained that as it received repayment from the Complainant in relation to the accounts, it reported to TransUnion that the number of days past due was changed from “30 days” to “1 day” for the account, and throughout the repayment period continued to notify TransUnion that the account had “1 day” past due until the Complainant settled all the payments in default.
Outcome
The Commissioner held that even though the 2006 Agreement was not made in accordance with the formal procedure for repayment agreement that the Bank referred to, considering that the Bank subsequently accepted the mode of repayment under the agreement and continued to manage the relevant accounts (including the due date and instalment), and that the Bank also recorded the 2006 Agreement, the nature of the repayment agreement was by no means different from a debt restructuring or a re-arrangement. Hence in this case the Bank’s failure to notify TransUnion of the 2003 Agreement and the 2006 Agreement was a contravention of the requirements of the Code of Practice on Consumer Credit Data.
As regards the fact that the Bank had set “1 day” as the minimum day of past due of a write-off account, TransUnion, following the PCPD’s compliance check, had notified its members (including the Bank) in 2008 that they should terminate the write-off account after the account was entered into a debt restructuring arrangement, and should open an evolving credit account so as to report to TransUnion whether overdue repayment still existed in the account concerned after entering into the debt restructuring arrangement. In this regard, the Commissioner considered that the Bank’s notification to TransUnion of the Complainant having a record of “1 day” past due while the Complainant made repayment on time did not accurately reflect the repayment status of the Complainant.
Accordingly, the Bank had asked TransUnion to delete the account information that involved inaccurate reporting, and undertook to the Commissioner that it would notify TransUnion of any debt arrangement including verbal repayment agreement it made with its clients.
uploaded on web in January 2014