Each New Zealander's last 200 payments on bills would be kept
on record for scrutiny by banks in a proposal by the Privacy
Commissioner, Marie Shroff.
The proposal, which is open to public submissions, would put
a person's bills on their credit record for two years -
whether they were late for electricity, gas or phone bills,
mortgage or credit card invoices, insurance, or other monthly
payments to participating institutions.
The banking industry says that under the proposed regime,
simply staying on top of bills would mean a better credit
rating and greater access to loans, while people struggling
to pay would avoid loading up more debt.
However, civil liberties proponents cautioned against
collecting so much sensitive information.
At present, credit records show only the times when a person
has inquired about getting credit and any instances of
defaults, and is updated only when things go wrong.
"It has been quite difficult to get rid of bad credit
experiences," Consumer NZ chief executive Sue Chetwin said.
Giving credit reporting agencies more information every month
made it easier for a person to rebuild their record, she
The proposal, which the Privacy Commissioner admits is
"intrusive", would start recording from April next year
whether bills were paid on time.
Credit reporting agencies would be given the authority to
collect the information, but it would be up to individual
companies - such as telephone and power companies and banks -
to join. Firms must provide their customers' information to
gain access to the databases.
The repayment histories would be presented as either a "yes"
or "no" for each month per account about whether due dates
The commissioner's office envisions a scheme in which the
reporting agencies would mark payments as paid or missed with
0s and 1s.
Agencies and banks would then put the numbers through
algorithms to determine credit-worthiness.
New Zealand Bankers' Association chief executive Sarah
Mehrtens said that missing a single phone bill payment "may
be unlikely" to affect the chances of getting a loan,
particularly for those with records of long-term regular
But Council for Civil Liberties spokesman Batch Hales said he
was "very suspicious" of the industry's claims. The
collection of sensitive personal information was risky, even
if there were attempted safeguards, he said.
Federation of Family Budgeting Services spokeswoman Margaret
Elsworth said there were benefits to the changes, but they
also caused some anxiety.