A lender, who cannot be named due to stipulations in the Privacy Act, has been caught inflating the size of debts on default listings This is putting borrowers at risk of being financially excluded.
Borrowers are at risk
It is estimated that tens of thousands of Australian borrowers are at risk thanks to the data breach.
Black marks on credit reports were recorded for all outstanding loan balances – not just the usual discrepancies for late repayments. Hundreds of customers have complained to the Credit and Investments Ombudsman over the last few weeks, which is how the breach was discovered.
Credit report problems comprised about 30 per cent of the near 5000 complaints to the Ombudsman last financial year. Most are alleging they had not received the legally-required two warnings before a default was recorded.
Ombudsman Raj Venga had this to say on the potential impact that the incorrect entries would have on affected customers securing future loans:
“It is very unlikely that you will be able to refinance your loan or take out an additional loan. You are also very unlikely to be able to purchase a mobile phone on a plan. And you are very unlikely to be offered a lease on a property.”
A dispute resolution has yet to be enacted. The Ombudsman recommending that all incorrect records be struck from credit reports entirely.
Furthermore, representatives from ASIC have recommended that all people using credit services review their credit report at least once every 12 months. The process to get incorrect listings rectified can take months and can be very difficult. Checking regularly is the best remedy to begin the process.
Finally, if you think you are at risk of defaulting, talk to your credit provider today. Request a free copy of your credit report from Veda. You don’t need to pay a credit repair company for detailed information about your repayments.
– Rory Callaghan