G.1 · Two “pre”s
Pre-approval and pre-screening, side by side
The two words sound alike and touch the same file, but the law treats them very differently.
| Question | Pre-approval | Pre-screening |
|---|---|---|
| Who starts it | You, by asking a lender | A licensed credit provider planning direct marketing about consumer credit |
| Who looks at your file | The lender, if it requests your report | The credit reporting body, against criteria the lender nominates |
| What can be used | Your credit report, alongside evidence of your finances | Credit information other than liability, repayment history and hardship information |
| What is recorded | If your report is requested, a credit enquiry, kept 5 years | The body makes a written note of its use; the assessment itself is not credit reporting information about you |
| Can you say no? | It starts only if you ask a lender for one | Yes: ask the body not to use your information this way, free of charge |
G.2 · The limits
What the exception allows, and no more
Section 20G of the Privacy Act sets six conditions, and the body must meet all of them.
- The lender has an Australian link and is a licensee.
- The marketing is about consumer credit the lender provides in Australia.
- Three kinds of information are left out: consumer credit liability, repayment history and financial hardship information.
- The body uses it only to assess whether you are eligible to receive the lender’s marketing, having regard to the eligibility requirements the lender nominated.
- You haven’t asked the body not to use your information this way.
- The body complies with any requirements in the credit reporting code.
What the code adds
A lender must not nominate criteria that point to people who are having, or may have, trouble meeting repayments on existing credit, except to leave those people out of the marketing. And a body must not use credit reporting information to build, or provide to a lender, a tool for predicting how likely someone is to accept an offer of credit, or for targeting or inviting someone to apply for credit or a change to it.
G.3 · Opting out
Asking a body not to pre-screen you
The request is made to a credit reporting body that holds credit information about you, and the body can’t charge you for making it or for putting it into effect. It must give effect to the request as soon as practicable, and keep a confidential register of the people who have asked.
The code’s note on the point says requests can be made through the body’s website if it has a facility for them, or by phone, mail, email or other means. The Act frames the request as one made to a particular credit reporting body, and the OAIC names three such bodies on its page about fraud bans.
The notice a lender gives before collecting your information must mention this right. File C lists the rest of that notice.
G.4 · Afterwards
What happens to the assessment
The result of a pre-screening is a pre-screening assessment, and the Act keeps it on a short lead.
- The body may pass it only to an entity other than the lender, with an Australian link, for the purposes of the lender’s direct marketing, and must make a written note when it does.
- That recipient may use it only for that marketing, and must note its use.
- Anyone holding the assessment must destroy it once it is no longer needed for those purposes, unless a law or a court or tribunal order requires it to be kept.
Breaches carry civil penalties under the Act. For a credit reporting body that uses or discloses credit reporting information for direct marketing outside the exception, section 20G names a civil penalty of 2,000 penalty units, and a court can order up to five times that against a body corporate under section 82 of the Regulatory Powers Act.