Who can place a marker on a credit file?

Streaky_Bacon

Hi,
I'd like to understand the process by which a company can place account information and/or default marker on somebody's credit file.

What is required for a company to be able to record this information on your file? Do they just need to notify you in the T&Cs that they may pass your information to CRAs? Are there any other requirements?

sourcrates

Hi,


You must have signed some kind of agreement, say for a loan, or a credit card, and in the terms and condtions it will state words to the effect of "we will pass information to credit reference agencies as to how you conduct your account".


By signing such an agreement, you consent to that happening.


The only other pre-requisite is that any such company must hold a valid consumer credit licence and be authorised by the financial conduct authority.

Paul_DNAP

This will be fully covered in the terms and conditions you have accepted when you took out the product.

Willing2Learn

Streaky_Bacon wrote: »

I'd like to understand the process by which a company can place account information and/or default marker on somebody's credit file.

What is required for a company to be able to record this information on your file? Do they just need to notify you in the T&Cs that they may pass your information to CRAs? Are there any other requirements?

The ICO state:

The Data Protection Act (DPA) doesn’t actually require the CRAs, or any other organisation, to have your consent before they are allowed to process your personal data as long as they have a legitimate reason for doing so and you have been told what is going to happen to your data. If you have taken out a loan or credit card you will probably find this in the original terms and conditions that you signed.

Because lenders rely on the information provided by the CRAs, it’s likely that they will refuse you credit if you don’t agree to your information being shared with a credit reference agency. However, organisations wishing to process sensitive personal data about you are subject to tighter controls around what constitutes a ‘legitimate reason’ for processing your data and may need to rely on consent more often. For the purposes of the DPA financial information is not distinguished as being ‘sensitive’ personal data.

You may find the definition of 'legitimate reason' to be quite interesting.

[Deleted User]

sourcrates wrote: »

Hi,


You must have signed some kind of agreement, say for a loan, or a credit card, and in the terms and condtions it will state words to the effect of "we will pass information to credit reference agencies as to how you conduct your account".



By signing such an agreement, you consent to that happening.


The only other pre-requisite is that any such company must hold a valid consumer credit licence and be authorised by the financial conduct authority.

Not strictly true. When you look into this, it turns out that an organisation doesn't need your permission (e.g. via a signed agreement) to place information about you with the credit reference agencies. Of interest here are the water companies, many of which now report your account without your permission, and also debt collection agencies.

Streaky_Bacon

sourcrates wrote: »

By signing such an agreement, you consent to that happening.

The only other pre-requisite is that any such company must hold a valid consumer credit licence and be authorised by the financial conduct authority.

Thanks. That matches with what I thought was likely. I thought that they might need to be FCA authorised, but wasn't aware of the CCL requirement.

Willing2Learn wrote: »

[FONT=&quot]The Data Protection Act (DPA) doesn’t actually require the CRAs, or any other organisation, to have your consent before they are allowed to process your personal data as long as they have a legitimate reason for doing so and you have been told what is going to happen to your data. If you have taken out a loan or credit card you will probably find this in the original terms and conditions that you signed.[/FONT]

Thanks. I saw that, but wasn't clear about the "doesn't actually require...your consent" and "as long as...you have been told what is going to happen".

The only way that makes sense to me is that you were told when you entered the agreement, but after that, they don't need your consent on a case by case basis.

johnsmith1890 wrote: »

Not strictly true. When you look into this, it turns out that an organisation doesn't need your permission (e.g. via a signed agreement) to place information about you with the credit reference agencies. Of interest here are the water companies, many of which now report your account without your permission, and also debt collection agencies.

Are you sure that the water companies don't have something in their T&Cs? My water supplier does (along with FCA authorisation and a CCL).

Are you aware of any cases where a DCA has placed any kind of marker on a credit file, where the original creditor did not meet the requirements mentioned above?

If they could do that I would expect them to do so very regularly, as it would be the perfect way to pressurise, without having to obtain a CCJ.

[Deleted User]

Are you asking for a reason (i,e, it's happened to you) or just in general?

[Deleted User]

Streaky_Bacon wrote: »

Are you sure that the water companies don't have something in their T&Cs? My water supplier does (along with FCA authorisation and a CCL).

Are you aware of any cases where a DCA has placed any kind of marker on a credit file, where the original creditor did not meet the requirements mentioned above?

You don't have an agreement with your water supplier (this arrangement is pretty much unique), and there are no T&Cs for the supply, so you didn't sign anything. DCAs - it's my understanding that if the debt is sold by a company that reports your account, then the company to which it's sold can also report it. It seems that credit reporting is a bit of a grey area and perhaps there's a need for tougher regulation.

Streaky_Bacon

!!! wrote: »

Are you asking for a reason (i,e, it's happened to you) or just in general?

No, just in general. I did have a dispute with Spark Energy a couple of years back, and wondered at the time if they would be able to report anything. I just had a look now, and they do not seem to have had a CCL. They did say in their T&Cs that they may report to CRAs though.

johnsmith1890 wrote: »

You don't have an agreement with your water supplier (this arrangement is pretty much unique), and there are no T&Cs for the supply, so you didn't sign anything.

I don't quite follow. I do have an agreement with my water supplier. I didn't sign anything, but they have a set of T&Cs which are part of the contract I entered into. Those include a statement that they will report account information to CRAs.

johnsmith1890 wrote: »

DCAs - it's my understanding that if the debt is sold by a company that reports your account, then the company to which it's sold can also report it. It seems that credit reporting is a bit of a grey area and perhaps there's a need for tougher regulation.

Yes, quite possibly. But, does the original company need to fulfill the three tests (T&Cs, FCA and CCL)?

[Deleted User]

Streaky_Bacon wrote: »

I don't quite follow. I do have an agreement with my water supplier. I didn't sign anything, but they have a set of T&Cs which are part of the contract I entered into. Those include a statement that they will report account information to CRAs.

I don't think so. As far as I know there is no such thing as 'an agreement' or T&Cs for domestic water supply. It's something to do with them operating as a monopoly. They simply TELL you how they are going to operate. Bad show, but they are allowed to get away with it. If you do have T&Cs maybe you could post a link to the relevant website, but I just looked (again) on a selection of water company websites and I couldn't find anything.

Streaky_Bacon

OK, I see where you are coming from. I still think that they would have to disclose how they will use your data, in their T&Cs or privacy policy, but you can't really opt out because their is only one supplier in the region.

They do seem to disclose it though. From Yorkshire Water

Where you receive services in advance of payment or may do so, we’ll give details of your personal account, including names and parties to the account and how you manage it/them to a Credit Reference Agency.• If you owe us money and do not pay in accordance with our payment terms, we’ll notify you of our intention to file a default and if still unpaid after 28 days we’ll inform a Credit Reference Agency.

and from Severn Trent

Like many other utilities, we share your personal data with, and receive your personal data from, Credit Reference Agencies (CRAs). This help us maintain up-to-date customer records, fraud prevention, identify potential customers falling into debt, and allow us to help customers at earlier stages through assistance and education