3. Credit default listings – know your rights
The TIO has recently observed an increase in the number of complaints about credit default listings. Credit default listings are just one credit management tool used by telecommunications service providers to try to recover debts from consumers. Default listings occur where a customer’s phone or internet account remains unpaid for a period
of not less than 60 days after the due date, and where their service provider lodges their name and the account details with a credit reporting agency. These details can stay on file for 5 years, even if the account is subsequently paid.
Complaints about default listings typically raise issues of significant detriment, with some consumers reporting that they are unable to obtain loans for a home or car. Similarly, small business owners report they are unable to apply for credit. This clearly can have devastating consequences, particularly in the current straitened environment where credit is already in short supply.
In listing credit defaults with an agency, industry members must comply with the Federal Privacy Commissioner’s Credit Reporting Code of Conduct (the “CR Code”). Accordingly, the TIO takes the requirements of the CR Code into account when considering complaints of this nature.
We are currently seeing many default listings complaints stemming from disputed debts, which suggests that there is significant room for improvement in communication between service providers and their customers, as well as debt collectors and those whose account has been default listed. This is troubling.
Of further concern is the regularity with which we are handling complaints regarding default listings where the procedure or the substantive basis for the listing is incorrect. This reinforces the importance of industry observing provisions within the industry Telecommunications Consumer Protection Code as well as the CR Code.
There are a number of grounds on which consumers can legitimately seek to have default listings removed. These include where:
• their service provider did not tell them adequately or even at all that their account was overdue
• their service provider did not tell them that their account could be default listed
• they had disputed the charges, or arranged with their service provider to pay the debt before the credit default was listed
• the account which was the subject of the credit default was not in their name
• the account was default-listed before the bill was 60 days overdue
• the account was default-listed a long time after it was due to be paid (therefore making verification difficult) or
• the details of the default listing are wrong (for example where the amount that has been default listed is different to the amount on the overdue account).
Generally speaking any one of the above claims, if shown to be accurate, may give the consumer a right to have the default listing removed.
If consumers are armed with information regarding what their service providers can and cannot do regarding default listings, we would hope to see some reduction in the incidence of complaints of this nature.
For more complete information on the TIO’s approach to default listings, see the following TIO Position Statements:
• On Disputed Default Listings
• On Disadvantaged and Vulnerable Consumers
