What's up by Charlie Bulos, Solicitor in Victoria

Updating credit profile…
The Financial Ombudsman Services (FOS) is the first ‘port of call’ to make the necessary complaint just to avoid expensive litigation and with this we can collate the evidence generated from this action or proceedings.
In the Dispute with Citigroup Pty Ltd (Case No. 346762) the FOS outlines the details of its determination and the Determination by FOS on the issues the parties raise.
The Facts:
The complainant is not identified to protect her privacy and can be called Celia.
Celia is credit card holder with built in insurance proposal with the application when she signed it and in case of financial difficulty arises the credit card holder is protected from paying which Celia signed and agreed. In the course of time and after losing her weekly payments she defaulted and applied for insurance claim. Her claim was refused claiming that she has pre-existing condition and did not warrant paying her claim. Although she has valid claim that the pre-existing defense is not true, for some reason she did not pursue.
In December 2009, the Citigroup Pty Ltd entered into agreement and Celia was allowed to pay the account instead of the original amount she was allowed to pay less. Celia agreed and settled the account with a note that the default listing with credit reporting agency had to be updated. The update of the credit default was not done and until 2013 this default listing was not updated.
Further application for finance or loan of Celia was declined not knowing was the reason. Finally, she found that this default listing is still there and holding approval all her credit applications.
Was the continued default listing accurate and up to date? The issue of embarrassment from being declined, is this part of the determination? The issue of document request?
Under the Privacy Act, a financial services provider (FSP) has obligation and must take reasonable steps to ensure the personal information it collects, uses or discloses is accurate. This did not occur and this FSP is obliged to update it when Celia settled the account. This means the default listing was inaccurately recorded on Celia’s credit file for 4 years.
Celia said that FSP failure to update the default listing prevented her from obtaining other loans. Celia listed all her applications which were declined.
The Ombudsman claims that when FSP failed to update the default listing Celia suffered considerable embarrassment. Celia credit file was accessed 10 times.
In the issue of document request, the Ombudsman says Celia is entitled to be provided with documents she requested. When Celia requested documents to support her claim and did not get them the FSP or Citigroup is in breached of clause 13 of the Code of Banking Practice.
In view thereof, the Ombudsman decided in favor of Celia allowing her compensation of $2,200 for those neglect or omission made.

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