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Veda Advantage lobbying for positive consumer credit reporting

July 22 2009

New Zealand’s largest credit reporting agency Veda Advantage has responded to a critic who said it should be moving to a positive credit reporting regime, that it is prohibited by law from doing so but is working with the privacy commissioner to do just that.

Spokeswoman Leigh Pearson said that under the law “we can only collect negative data on consumers; you can collect positive data in the commercial space which we do as well.”

‘In New Zealand credit reports for individuals contain only negative information such as defaults on loans and bankruptcies.

Ms Pearson said that Veda would like to add six fields of positive data about consumers, and has been working through the process of reviewing the current code with the privacy commissioner for the last year.

She notes that New Zealand is one of the few countries in the OECD that don’t have some form of positive reporting, and also that there’s “quite big economic and social issues” associated with moving to a more comprehensive credit reporting regime.

Most OECD countries include positive information such as details on a person actually paying their bills.

“So with Mr Tan we agree that there needs to be a move to some form of positive reporting, but we can’t do it right now. The other thing is that he’s not the only one collecting positive information in the way he asserts”, she said.

Ms Pearson also notes that CreditWorks managing director Ronnie Tan has a very small, “minute” business, which he wanted Veda to buy, “so there’s a bit of history there.”

Mr Tan had erroneously accused Veda Advantage’s new product aimed at SMEs of providing a “narrow and potentially dangerous” view of an individual or business’s creditworthiness, but Veda Advantage’s new credit scoring system is not designed for consumers.

It is designed for SMEs that can’t afford an in-house scoring system to asses risk when it comes to extending credit to consumers, unlike banks and large corporates.

Company managing director John Roberts says “we have now taken credit report data and distilled it into a credit score – which makes it easier for SMEs to assess whether they are prepared to extend credit.”

Sourece: http://www.nbr.co.nz/article/veda-advantage-lobbying-positive-consumer-credit-reporting-106173