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The Government of Barbados has recently put before the House of Parliament legislation (The Fair Credit Reporting Bill) for the regulation of Credit Bureaus by the Central Bank of Barbados.
WHAT IS A CREDIT BUREAU
A Credit Bureau according to the Bill is in effect a person licensed to prepare, produce or provide credit reports, credit scores, credit references and other value-added products to those who request them with the consent of the Consumer who is the subject of the data report. The Credit Bureaus are into this business to make money and therefore the more users and subscribers they have the better it would be for them.
CONSENT AND DATA PROTECTION
Throughout the legislation emphasizes that reports must clear, fair and not misleading. Emphasis is placed on security in terms of the collection and retention of data and the Data Protection Act is also invoked to give support to the measures contained in this Bill.
One of the big take-aways form the legislation is that the Consumer from whom this data is collected must give consent.
One might wish to speculate here that not giving one’s consent could mean that the service which one is requesting might very well not be provided if one does not consent to sharing one’s information with a Credit Bureau.
So it is likely that you will be asked for your consent when sitting before a service provider in the midst of requesting a loan or the installation of a utility. Section 21 which mandates consent includes consent by the consumer in writing but it also includes the service provider publishing it in a conspicuous place in its place of business or on a website.
SERVICE PROVIDERS PROVIDING INFORMATION TO CREDIT BUREAU
Section 16 of the Bill is very interesting as it makes it mandatory that certain institutions should provide information to the Credit Bureau:
1. Financial Institutions
2. Credit Unions
3. Insurance Companies
Then the Central Bank has the power to mandate that certain other entities provide information to Credit Bureaus. One might wonder why this is left to the Central Bank and is not mandated by Parliament as in the first three cases. These entities include:
1. Barbados Light & Power
2. Barbados Water Authority
3. Corporate Affairs and Intellectual Office
4. The Land Registry
5. The Registration Office
6. Entities registered under the Telecommunications Act (telephone companies)
7. Persons selling goods under the Hire Purchase Act
8. Dealers in Security
9. The Student Revolving Loan Fund
10. Any other entity which has credit information
The legislation also goes on to provide that once the consumer agrees then any other entity can provide credit information to a Credit Bureau. The Central Bank can also provide information on its own personnel where it has acted as a creditor.
The legislation, with certain safeguards also allows for the cross border provision of credit information on Consumers.
Section 17 further provides that from the time the information provider enters into a loan agreement with you, that that information should be forwarded to the Credit Bureau. It would seem then that a substantively all of your credit information about your loan arrangement would be submitted to the Credit Bureau.
Even after the loan has been repaid and the credit relationship comes to an end the data can be kept for seven years. In direct contrast there is a special limitation period of 2 years to bring any action for breach of the provisions of the Act.
USING YOUR CREDIT REPORT
Section 20 outlines the possible purposes for which the Credit Report can be used:
1. Application for credit;
2. Application to act as a guarantor for credit;
3. Entering into or renewal of a tenancy agreement;
The Definition Section and Section 28 gives some indications of what consumers may face from an adverse credit report:
1. The refusal of an application for credit;
2. An increase in the interest rate on a loan or other credit facility;
3. A decrease in the credit limit on a revolving credit facility;
4. The cancellation, freezing or suspension of a loan or other credit account;
5. The refusal of business or employment; or
6. An unfavourable change in terms of coverage and the amount of any credit or insurance, existing or applied for in connection with underwriting credit or insurance, on the part of the data subject or the request for a guarantor or collateral.
There is an ongoing discussion as to whether this is beneficial for Barbadians.
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