In June 2014 a man known as KB arrived in Rome for a two-week Italian getaway. After a long flight from Australia he was looking forward to experiencing all the delights of the Mediterranean summer.

But when KB reached Rome international airport, things started to go wrong. He tried to make a payment but his credit card was declined.

That evening he called American Express and was told that a court had recorded a $7,000 debt against him. His credit card had been suspended and he could make no further purchases on it during his holiday.

This might have been quite reasonable. Except the debt wasn’t KB’s at all.

It turned out that the court had issued a debt notice against someone with a similar name – the same surname but a different first name – who happened to live in the same apartment complex. The credit reporting agency Veda Advantage Information Services and Solutions had then assumed that this was KB and informed his banks.

It took KB months to untangle what had gone wrong and reverse some of the damage it caused.

“With no credit on credit cards I had to manage my time in Italy on very limited funds with no scope for shopping or taking side tours,” KB would tell Australia’s privacy commissioner. “In short, a holiday costing over $20,000, booked and planned with much anticipation, was ruined.”

KB’s story is outlined in a decision by the privacy commissioner, Timothy Pilgrim.

Veda was ordered to pay KB $15,000 in compensation and provide him with a written apology. The privacy commissioner also ordered that the company initiate a review into how it collected and used court proceedings to inform its credit reporting.

The companies that control your purse strings

In Australia, credit reporting agencies tell the story of your financial life. These companies harvest information to generate credit scores that can then be accessed by banks and financial providers.

You may never have heard of Veda, or have spoken to its staff. But odds are if you have a credit card, Veda has something on you. The company bills itself as “the leading provider of credit information in Australia”, with a 96% market share and a database of 16.5 million credit-active Australians. Last February the company was acquired by Equifax Inc, one of the three largest US credit agencies.

Gerard Brody, the chief executive officer of the Consumer Action Law Centre, says there are strong legal obligations that govern how credit reporting agencies hold and share information.

“If it is incorrect it can have really disastrous consequences for people when they apply for finances. We’ve had issues where a person can’t get a home loan because they’ve had incorrect information,” Brody says.

It wasn’t just KB’s holiday that was affected. KB owns two businesses that rely on several suppliers. Veda had also notified Citibank Visa of the supposed debt – a number of his suppliers were paid through the Visa card, and attempted payments were blocked.

When KB landed back in Australia in July 2014, substantially less relaxed than he would have liked, he took urgent steps to try to work out what was happening. He requested his credit file from Veda.

He called Veda on 18 July and asked for the debt to be removed urgently but it refused to do so. It told him to contact the court that had issued the debt notice “and indicated that Veda would not take action until it heard from the court”.

KB hired a lawyer who contacted the court. But the court said it had provided the correct information to Veda and would not be changing anything.

When KB contacted Veda again it reiterated that the judgment had been recorded as per the court listing; it would take no further action until the court contacted it directly.

The court eventually contacted Veda, which removed the judgment from KB’s credit file on 8 August. It wasn’t until 30 September that his credit providers were advised that the listing had been removed.

The consequences of the incorrect debt listing for KB were immediate:

American Express reduced his credit limit from $40,000 to $13,100. This was $30 less than the current balance, effectively preventing the use of this card. The company then advised him he could not use his cards for six months.

Citibank suspended his credit cards from use until further notice.

NAB reduced his credit limit by $1,500 to $18,500.



Because of the complexities and uncertainty of his situation, some credit limits had still not been restored by May 2016. The restrictions on his cards prompted suppliers to express concern, he says, and he suffered “great financial losses” as a result.

He wrote to the privacy commissioner: “On the night of 1st July 2014 (Rome time) I received a call from two suppliers to advise that they have tried to charge the credit card provided but it is not going through and until invoice is paid goods will not be supplied. In fact one supplier asked me if the business was going alright.”

Veda said its data-matching process had assumed that the differences between KB’s name and address and the information issued by the court were the result of a “slight typographical error”. Because its system did not consider these differences to be substantial, it matched the debt. There appears to be no human intervention in the data-matching process, which invites comparisons with the “robo-debt” scandal that has engulfed Centrelink.

The privacy commissioner found that Veda had interfered with KB’s privacy by failing to keep accurate and up-to-date credit information about him, by using credit information that was false and misleading, and by failing to notify his credit providers in writing about the corrected information.

“The steps that Veda has indicated that it has in place to ensure the accuracy of credit information relating to judgments, in my view, place an undue burden on individuals to identify errors in their credit reports and draw these to Veda’s attention,” Pilgrim wrote.

“In this case, both the complainant’s name and address did not match the information provided to Veda by the court. Once Veda became aware that neither the name or the address provided by the court were a match, it should have been on notice that further steps were required to confirm the accuracy of the information it had collected.”

A spokesman for Veda told Guardian Australia that in a “very small number of instances” errors could occur in their data matching processes.

But he said the company said it “moved quickly – within 24 hours - to remove the adverse information after receiving updated information from the court”.



“The OAIC did find that Veda took reasonable steps to correct the information after it became satisfied that the information was inaccurate,” he said.

“We are using the lessons learnt from this case, as well as always working to improve our matching rules.”

Right of free access

Weeks after KB’s case was released, the privacy commissioner found that Veda had failed to uphold privacy laws by failing to prominently state that consumers could gain free access to their credit files, either online or by phone.

The case was effectively a class action brought by consumer groups including the Financial Rights Legal Centre, the Consumer Action Law Centre, Financial Counselling Australia and the Australian Privacy Foundation.

Pilgrim also found that Veda had been disclosing the personal information of Australians who sought access to their free credit files for direct marketing purposes, and that it was unreasonably charging consumers for faster delivery of credit reports.

Veda did improve some of its processes during the course of the privacy case, but Pilgrim found it “continued to engage in conduct which constitutes an interference with the privacy of class members”.

Kat Lane, the acting coordinator of the Financial Rights Legal Centre, said: “This is a big win for consumers who simply want free access to their credit report as is their entitlement under the law.

“The privacy commissioner has confirmed that consumers are entitled to a free report, and gaming of the system to advantage the commercial interests of credit reporting agencies is not allowed.”

A spokesman for Veda said it had been taking action to improve access for consumers and would allow phone requests for free credit files within six months. It also pledged to refund some customers who had paid $69.95 for an “MyCreditFile express” report.

Do you know more about credit reporting agencies? Contact Paul Farrell at paul.farrell@theguardian.com or via the secure messaging app Signal on +61 457 262 172.

