Farm Ireland
Independent.ie

Wednesday 18 July 2018

What information is available to others about your finances?

Martin O'Sullivan looks at what the new Central Bank credit register will mean for consumers

'I have come across cases where the information on a client's credit report was incorrect'
'I have come across cases where the information on a client's credit report was incorrect'

My late mother frequently posed the rhetorical question "is there anything sacred anymore?"

Well, if she was around today and was referring to the confidentiality of one's indebtedness, there doesn't appear to be.

For many years we have had the Irish Credit Bureau harvesting, harbouring and disseminating (totally legally) details of your debt servicing performance to authorised parties. Now the Central Bank have got in on the act with the new Credit Register.

The Central Bank will say that the Government gave a commitment as part of the EU/IMF Programme of Financial Support for Ireland to develop a legal framework for the collection and centralisation of financial information on borrowers.

However, I'm not entirely sure why we need another such register and why the existing Credit Bureau could not have had its remit broadened to cover debt not currently covered by its services.

There seems to be an element of reinventing the wheel.

Recent correspondence from banks to customers about their obligations to furnish borrower details to the Central Bank's new Credit Register has caused a considerable amount of anxiety among some borrowers as was expressed by callers to a recent Joe Duffy show.

While the callers' annoyance was understandable, the reality is that for many years information about a person's borrowings has been accessible to lenders through the Irish Credit Bureau (ICB).

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The ICB has members such as banks, credit card providers, credit unions, finance companies and local authorities.

They provide customer borrowing performance details to the ICB in regard to mortgages, car loans, personal loans, leasing/hire-purchase agreements and credit cards but not overdrafts or business loans.

ICB members can gain access to an existing or applicant borrower's details, generally once the borrower has signed a loan application form.

The ICB report will provide details on the performance of the loan in terms of meeting repayment schedules and the performance will be rated to enable the intending lender make a decision as to whether the intending borrower is good for the loan.

CREDIT REPORTS

Generally, once you sign a loan application form you have authorised the lender to send your loan details to the Credit Bureau and given the lender permission to access your credit details.

This will involve seeking sight of your credit report.

A credit report includes your personal details such as your name, address and date of birth along with current loan details and loans held within the past five years.

The report will detail missed payments, loans that you failed to clear, loans that were settled for less than what was owed and legal actions that the lender may have taken against you.

The report will score your performance and also provide a history of enquiries made about your credit details.

Your credit report is only available to a member lender who has your authority to access information. You can also request a copy of your report from the ICB for a fee of €8.

ERRORS

Over the years I have encountered a number of cases where the information contained in a client's credit report was incorrect.

In all such cases this was not the ICB's fault, but rather the lender was to blame in providing incorrect loan details or inaccurate personal information.

Some of these cases resulted in legal action with the borrower being compensated.

By law, financial institutions must ensure that information they hold or give to anyone else about you is correct and up to date.

So, you have the right to insist that they correct any incorrect information about you. If you find a mistake in your report, ask your lender to correct these details.

Most lenders will act to correct any mistake and amend your credit report immediately.

However, if you experience problems or delays, or if your lender fails to put things right, you can consider making a formal complaint and referring the matter to the Office of the Data Protection Commissioner. If you have suffered a clearly identifiable financial loss as a result of such an error you should talk to your solicitor.

CENTRAL BANK CREDIT REGISTER

The new Credit Register referred to earlier should not be confused with a credit ratings agency such as ICB.

The main difference is that this register is established under the Credit Reporting Act 2013 and lenders are obliged to comply in making borrowers information available.

It is intended that the information collected will help lenders, consumers and the Central Bank in its role of safeguarding stability thereby protecting consumers.

The new register does not rate a borrower's performance but rather lists his/her loans along with details of missed payments.

Apart from that distinction, other differences are that business loans are included. Hire Purchase Agreements and PCPs are not currently included but the Central Bank say that they will be in the future.

Once this register is fully up and running the information will be available to over 500 lenders and firms that have acquired loan books from Irish Banks.

It is anticipated that credit reports will be available for lenders and borrowers in early 2018.

Individual borrowers will be able to request their credit report at any time free of charge.

In my view borrowers might be well advised to seek sight of their Credit Register report as it will tell you what information is available about you and whether that information is accurate.

Martin O'Sullivan is the author of the ACA Farmers Handbook. He is a partner in O'Sullivan Malone and Company, accountants and registered auditors; www.som.ie


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