Comprehensive credit reporting

[Deleted member 29185]

And here I am believing they always shared...through credit reporting agencies. Am I the only one that tells the truth about the number of cards and the limit on each? I deliberately have very few cards and always cancel those that I don't want. I must admit, at times cancelling cards can be difficult. Some don't like you doing it and actively delay as much as possible, the cancellation.

 

[get me outta here]

I find that if I really want to cancel and not looking for an offer to stay that I can't refuse, and I did do a big spring clean recently on ccs, I email from within my account and it takes just a few seconds to type.

And here I am believing they always shared...through credit reporting agencies. Am I the only one that tells the truth about the number of cards and the limit on each? I deliberately have very few cards and always cancel those that I don't want. I must admit, at times cancelling cards can be difficult. Some don't like you doing it and actively delay as much as possible, the cancellation.

 

[burmans]

And here I am believing they always shared...through credit reporting agencies. Am I the only one that tells the truth about the number of cards and the limit on each? I deliberately have very few cards and always cancel those that I don't want. I must admit, at times cancelling cards can be difficult. Some don't like you doing it and actively delay as much as possible, the cancellation.

While this article is a bit old, the situation remains

Credit reporting move opposed by big banks

Comprehensive Credit Reporting was "allowed" by the Privacy Act changes last year but remains voluntary. Lots of reasons for people not to participate now, one being that the benefit to a lender is access to everyone's elses data but they dont particularly want to share there own data (because potentially other lenders could go after your customers - despite this being not allowed by the laws). To get over this the industry body (ARCA) draft a set of "Principles of Reciprocity and Data Exchange", this has now been approved by the ACCC and the first major (NAB) has indicated an "intention" to contribute data.

But the other majors arent yet in and the main bureau (Veda) are still opposed to some of the requirements of the Principles. It will happen but its taking a long time!

 

[Jeffrey O'Neill]

While this article is a bit old, the situation remains

Credit reporting move opposed by big banks

Comprehensive Credit Reporting was "allowed" by the Privacy Act changes last year but remains voluntary. Lots of reasons for people not to participate now, one being that the benefit to a lender is access to everyone's elses data but they dont particularly want to share there own data (because potentially other lenders could go after your customers - despite this being not allowed by the laws). To get over this the industry body (ARCA) draft a set of "Principles of Reciprocity and Data Exchange", this has now been approved by the ACCC and the first major (NAB) has indicated an "intention" to contribute data.

But the other majors arent yet in and the main bureau (Veda) are still opposed to some of the requirements of the Principles. It will happen but its taking a long time!

There I thought the banks would love this as it should help them weed out risk.

I was hoping this would make things easier for me as the banks would have a clearer idea of how many cards and what kind of overall access to credit I currently have, but seems that's unlikely to happen.

 

[burmans]

There I thought the banks would love this as it should help them weed out risk.

I was hoping this would make things easier for me as the banks would have a clearer idea of how many cards and what kind of overall access to credit I currently have, but seems that's unlikely to happen.

Smaller credit providers do love it for exactly that reason as it provides more data to make decisions on. For the biggest bank, CBA, though they already boast of having account data of 50% plus of Australians (not sure if that's correct but thats the claim). So for them the benefits are less and they run the risk of losing business given this essentially provides the smaller lenders with similar data as they have. Hence the reluctance to participate, they see their data as an asset and dont want to share.

I think this will happen, all the smaller lenders are keen (including the multinationals) and NAB have indicated they will participate. Eventually the majors will have to.

And there is now a push to make it complusory. E.g. ME Bank’s new CRO to test impact of new credit rules | afr.com

I think the ACCC themselves may have raised this as a possibility but cant find the link.

 

[significance]

Yesterday, I received two snail-mail letters. One was from American Express, confirming that I had cancelled my account. The other was from Woolworths Money, inviting me to accept a big increase in my credit limit. Was this coincidence, or did the first trigger the second, through detailed credit ratings?

 

[burmans]

Yesterday, I received two snail-mail letters. One was from American Express, confirming that I had cancelled my account. The other was from Woolworths Money, inviting me to accept a big increase in my credit limit. Was this coincidence, or did the first trigger the second, through detailed credit ratings?

Coincidence
a) they wouldnt know yet (as above)
b) the law actually prohibits using of credit data for marketing

Far more likely is, you are paying your card off OK now, you are therefore a good customer and they want to encourage you to lend more (with them).

 

[significance]

Coincidence
Far more likely is, you are paying your card off OK now, you are therefore a good customer and they want to encourage you to lend more (with them).

Well, yes, but I have had the card for years and have always paid it off in full each month. This is the first time they have sent me an invitation to increase my limit, and it is for a 50% increase.

 

[TomVexille]

Well, yes, but I have had the card for years and have always paid it off in full each month. This is the first time they have sent me an invitation to increase my limit, and it is for a 50% increase.

My guess is that they're trying to give you enough rope to get yourself into a little trouble...

 

[burmans]

Well, yes, but I have had the card for years and have always paid it off in full each month. This is the first time they have sent me an invitation to increase my limit, and it is for a 50% increase.

The banks seem to be generally sending out a lot of invitations to increase limits at the moment. My theory is that given Comprehensive Credit Reporting should increase competition they are trying to get good customers to increase their credit limits BEFORE it hits.

But whatever the reason I dont think you are necessarily special in getting an invite!

 

[trippin_the_rift]

Smaller credit providers do love it for exactly that reason as it provides more data to make decisions on. For the biggest bank, CBA, though they already boast of having account data of 50% plus of Australians (not sure if that's correct but thats the claim). So for them the benefits are less and they run the risk of losing business given this essentially provides the smaller lenders with similar data as they have. Hence the reluctance to participate, they see their data as an asset and dont want to share.

Additionally the big banks will be feeding data into the new system which only increases the power and value of Veda etc. and decreases the power of the banks own data. I can't see banks wanting to contribute data to the system if they're not being compensated...

 

[significance]

But whatever the reason I dont think you are necessarily special in getting an invite!

Of course not - I get them constantly from my other banks. Just found the timing interesting on this one!

 

[burmans]

Additionally the big banks will be feeding data into the new system which only increases the power and value of Veda etc. and decreases the power of the banks own data. I can't see banks wanting to contribute data to the system if they're not being compensated...

Indeed, though the Responsible Lending laws may have some impact on this. Both ASIC and the Ombudsman schemes have had something to say about this already, the Responsible Lending laws require lenders to take reasonable grounds to verify that the customer can afford the loan. Essentially once there is a reasonable number of credit providers using CCR (and this looks close) the suggestion is that lenders would not be taking reasonable care if they didn't check with a bureau. And of course the basic principle of the Principles of Reciprocity the ACCC has just registered is that to receive data you must contribute.

Aside from the breaking the law aspect the other factor is that if you have lent to someone without taking reasonable steps to ensure they can pay you would likely have difficulty enforcing repayment.

The other point to note about Veda (and I'm not disgreeing with what you say, this was why they were firstly bought by a venture capitalist and then floated last year) is that this whole situation is why the majors took a stake in Experian. To me the fact they took this stake indicates that they understand that CCR will come (even if they don't 100% like it) and to mitigate Veda's dominance they bankrolled a competitor to keep competition up and hence reduce the ability of Veda to ramp up costs.

Personally I suspect that if banks dont come to the party this may get regulated. Both Veda and DnB have research showing the benefits to the Australian economy of CCR is huge, sure this was influenced by the fact they commissioned it but having read those reports the evidence is pretty compelling this is something we need as a country. We are after all one of the last OECD countries not to have CCR.

 

[Beta4Me]

Am I the only one that tells the truth about the number of cards and the limit on each?

Maybe...

 

[burmans]

Maybe...

Noting the title of the thread I suspect a fair few people will be caught out when this comes into effect.

 

[Beta4Me]

Noting the title of the thread I suspect a fair few people will be caught out when this comes into effect.

My favourite is Citibank's application form: credit limit (excludes cards you intend to close upon the opening of this facility). Well, about the time I made the application, my intention was to close everything. By the time the new facility is opened, I've changed my mind!

 

[get me outta here]

In one of the recent posts somewhere in a cc thread I think it was, someone said that CCR has now come in. Is that correct as I haven't heard to that effect?

 

[TomVexille]

In one of the recent posts somewhere in a cc thread I think it was, someone said that CCR has now come in. Is that correct as I haven't heard to that effect?

As I think I understand it, it is available, but the majors are mostly refusing to provide the information to the reporting bodies. IIRC NAB is the only one so far that has agreed to do so...

 

[burmans]

As I think I understand it, it is available, but the majors are mostly refusing to provide the information to the reporting bodies. IIRC NAB is the only one so far that has agreed to do so...

Yep, this is correct. I think they all have projects looking at this but not really high priority for them and until we have volume CCR not really that useful.

 

[coles525]

I'm with nab, basic non earning card and rewards card. Nothing listed in the "new reporting" on my credit file.