With regard to the proposed amendments set out in the Consultation Paper, the Consumer Council has the following views for consideration of the Privacy Commissioner for Personal Data (PCPD).
- Technical amendments as a result of the expiration of the transitional period
The Council has no objection to the revisions proposed to deal with the lapse of restrictions imposed on credit providers from access to positive credit data of existing customers during the transitional period.
- Amendments relating to the retention of data in relation to accounts written-off due to bankruptcy orders being made
The Council understands the longer the retention period of account data, the better for credit providers to make credit assessment. However, the Council believes that the data made available for credit assessment should not be excessive, as stipulated in the Personal Data (Privacy) Ordinance, in order to protect consumer interests.
On the matter of whether or not to go for a longer retention period for "write-off account" data, the Council raises the following points for your consideration:- Suitability of adopting a broad-brush approach: It is debatable to what extent early write-off of account data due to bankruptcy can infer material defaults in a bankrupt's all other accounts. If that is in doubt, it is questionable whether the CRA should be allowed to retain all the account repayment data in its database until 5 years after final settlement of the accounts as if there were cases of material default.
- Negative impact on the bankrupts: Allowing the data relating to a write-off account with no material default due to the making of a bankruptcy order against an account holder to be retained in the CRA database as if they were account repayment data that reveal a payment default may defeat the purpose of shortening the discharge period under the Bankruptcy Ordinance to allow a bankrupt to start afresh after discharge of the bankruptcy.
- Level of materiality: It is mentioned in the Consultation Paper that bankruptcy may even be more important than material default in that it evidences a much more serious financial condition. For that reason, the fact of a bankruptcy order and a period of 5 years from the discharge from bankruptcy for the CRA to retain the account repayment data in its database should adequately assist credit providers in their lending decisions.
- Suitability of adopting a broad-brush approach: It is debatable to what extent early write-off of account data due to bankruptcy can infer material defaults in a bankrupt's all other accounts. If that is in doubt, it is questionable whether the CRA should be allowed to retain all the account repayment data in its database until 5 years after final settlement of the accounts as if there were cases of material default.
- Miscellaneous Amendments
Updating of account data
To truly reflect a customer's creditworthiness, it is very important to ensure his account data in the CRA database is accurate. The Council therefore supports the PCPD's proposal of specifying the time allowed for credit providers to update status of an account with default data (in particular where there is change in the amount in default).
Retention of account general data
Many consumers in Hong Kong may not take the initiative to contact credit providers to terminate their credit cards, even if they are no longer using them. In such circumstance, the Council is concerned that allowing the CRA to retain the account general data until actual termination despite account inactivity for over 5 years may be unduly prolonging the retention period without necessarily enhancing consumers' credit exposure.
If an account has been inactive for a long period of time so that there is no repayment data, its value to credit providers may be questionable. The Council is of the opinion that if the CRA wants to keep account general data beyond 5 years from the date of creation of repayment data, it should obtain the consent of the customers concerned.
Account repayment data
The Council agrees to the PCPD's proposal of requiring a credit provider to supply the date of final settlement of the amount in material default to the CRA for calculation of the retention period for account repayment data. It is the responsibility of the credit provider who inputs default data in a customer's account to inform the CRA upon the final settlement of the amount in default.
