Credit Rating Agencies (Hansard, 9 October 2002)

§ The Parliamentary Secretary, Lord Chancellor's Department (Baroness Scotland of Asthal)
My Lords, the agencies are implementing procedures approved and monitored by the Information Commissioner to restrict the disclosure of such third party information. Of the two main agencies that are not yet compliant, I understand that one expects to be so by 2003. The other is keeping to a schedule agreed with the commissioner and will report progress to him later this month. The Data Protection Act requires information to be both accurate and adequate. The commissioner can take enforcement action if it is not.

§ Lord Higgins
My Lords, I thank the Minister for that reply. Is it the case that some four years after the passing of the Data Protection Act, and some five months after she last replied to this Question, companies are still not complying? They have had years to get their computer systems right. Should the data protection authorities impose a tight deadline and, if necessary, impose penalties on companies that have not complied?
On the second point, it is clear that inadequate and inaccurate information is seriously affecting many people: sometimes the wealthy, but more particularly the poor. Should it be possible for the public not only to correct mistakes in their data, as they are able to do, but also to add additional information if it is clear that their credit record is inadequate and having an adverse effect on them?

§ Baroness Scotland of Asthal
My Lords, I understand the anxiety of the noble Lord about this matter. The Act was passed in 1998 and came into force in 2000. However, there is a need to amend business systems, including IT systems, and the proposals cannot be implemented by every organisation overnight. It is not only the credit reference agencies which have to make significant changes, but also the lenders which supply them with information. The commissioner is taking the matter seriously. The agencies have a schedule with which they are complying and the commissioner can take action if he believes that the agencies are not addressing their minds with the appropriate level of vigour to the issue. From what we can gather, it appears that at the moment the commissioner is content with the progress that is being made. It is for the commissioner to act independently of government in relation to this matter if he feels that there is insufficient progress.
There is also an opportunity, as the noble Lord rightly says, under Section 7 of the 1998 Act for anyone to obtain a copy of information held about him or her by a credit reference agency for a fee of £2 and to have incorrect information removed or 257 amended or to have a note put on the file to explain why he or she believes that the information is wrong. There is an opportunity for people to do that.

§ Lord Razzall
My Lords, does the Minister accept that there is a much wider problem than the noble Lord, Lord Higgins, has suggested? Does she accept that at what I would describe as the bottom end of the loan finance business there are a significant number of advertisements being shown every day on the television aimed at people at the bottom end of the market, to which they are responding, and they are then being turned down? Their credit reference agency is putting them down as having been ruled out and such people are often not equipped to go through the "middle class" route of writing the kind of letters suggested by the noble Baroness. Does she accept that that is a significant problem?

§ Baroness Scotland of Asthal
My Lords, we can see that that is a problem. People need the right level of information provided to them. The noble Lord will know that there is a task force on over-indebtedness, which was set up in October 2000, to focus on practical ways of achieving more responsible lending and borrowing. Its first report was completed in April 2001 and published in July 2001. Five working groups were then set up to consider the key questions that consumers should ask when taking out a loan, identifying best practice and certain marketing techniques and the provision of key information to consumers. As the noble Lord rightly says, those matters are important. They are, as they should be, being addressed and we are dealing with the matter.

§ Lord Wedderburn of Charlton
My Lords, does my noble friend accept that, although there is a commissioner who, as she has explained, has an independent role in the matter, the Government have their own responsibility to deal with this market and to clean it up? They should not show as little interest as we have already heard this afternoon they show in the case of scandalous directors' fees in the corporate sector.

§ Baroness Scotland of Asthal
My Lords, I hope that no one in this House will misinterpret what I said to be a lack of interest. The Government acted and acted speedily. The Data Protection Act has greatly improved the position since 2000 when it came into force.
The role of the commissioner is an important role, and the rights of individuals are very much better looked after now than ever before. It is a matter which the Government intend to keep under active review. The commissioner has the right and responsibility to discharge the duties given to him under the Act by Parliament. We expect the commissioner to discharge that duty and to discharge it properly.