Vulnerable customers to be protected under new credit reporting rules
Major banks will exclude customers under hardship agreements from new data reporting rules.
The Australian Banking Association (ABA) has confirmed that financially vulnerable customers will be protected under the new comprehensive credit reporting regime, which came into effect on 1 July 2018. The new rules saw the major banks – CommBank, ANZ, Westpac and NAB – mandated to share at least 50% of their customers' comprehensive credit data with credit reporting bureaus. They have 90 days to do so from 1 July.
However, there were concerns that customers who had reached hardship agreements with their banks would be unfairly treated under the new rules as this would be listed on their credit report and could make it difficult to access credit in the future.
The four major banks have now agreed that customers who have reached hardship agreements with their banks will not be included. This will continue for the first 12 months of the regime, following which the Attorney-General will conduct a review.
“Australia’s banks have been working closely with the Federal Government and other stakeholders to ensure we get this major reform right, without unfairly treating some customers, and implemented without delay,” said Anna Bligh, CEO of the Australian Banking Association.
“As with all major reforms in banking, it’s important we don’t leave people behind."
The announcement from the ABA noted that people who have experienced hardship due to job loss, illness, natural disasters and other similar scenarios need to be protected under the new regime.
“Unexpected events happen in life, which banks understand, therefore it’s important that we can discreetly show this on credit histories to make sure customers don’t have further difficulty in the future,” Bligh said.
According to Bligh, the four major banks are committed to meeting the 30 September deadline to have 50% of comprehensive data shared.
You can check your credit score and full credit report, provided by Experian, for free with finder to keep track of when new comprehensive data is included. You can also find out more about the new credit reporting rules in our guide.