Credit Ombudsman now accepting commercial credit providers

The Credit Ombudsman Service (COSL) is now accepting membership applications from those credit providers who are required to join an external dispute resolution (EDR) scheme recognised by the Office of the Australian Information Commissioner (OAIC).  The requirement applies to credit providers who wish to participate in the credit reporting system. EDR membership is required when credit providers disclose credit information to a credit reporting body (including identity information about an individual to obtain a consumer credit report about the individual), or access such information. 

Under the Privacy Amendment (Enhancing Privacy Protection) Act 2012, which commences on 12 March 2014, the definition of  ‘credit provider’ is very broad and includes an organisation or small business (a supplier) that carries on a business in the course of which the supplier defers payment for goods or services for at least seven days.

Under a recent Regulation, the obligation to be a member of an EDR Scheme does not apply “in relation to the disclosure of credit information by the credit provider if the disclosure is made in connection with the provision of commercial credit”.

The Regulation is effective on an interim basis for 12 months (to 11 March 2015).

However, this exemption does not apply to certain commercial credit providers; namely, trade creditors that offer consumer credit to individuals by, for example, deferring for seven days or more.

Further, during this transitional period, the OAIC is encouraging all commercial credit providers to become a member of a recognised EDR scheme where there is one available for them to join (such as COSL).