Key Points
- A default can only be listed if the conditions in the Privacy Act 1988 were met, including the required written notices
- Credit providers and credit reporting bodies must take reasonable steps to keep credit information accurate, up to date and complete
- A correctly listed default generally stays on file for 5 years, even once it is paid
- Whether a listing can be challenged depends on the individual file; outcomes depend on the creditor's response and are never guaranteed
Scenarios We Commonly See
Each scenario below describes a typical situation in general terms, explains the relevant rules and lists what our solicitor checks. None of them describes a particular client.
A telco default listed without proper notice
A small telco default appears for an account the person thought was closed, and no warning letter was received. Sections 6Q and 21D of the Privacy Act 1988 set out the notices a credit provider must give before listing a default.
A telco default affecting a car finance application
A car finance application is declined or priced higher because of a single telco default. Whether that listing met the legal requirements is worth checking before applying again.
A default listed while the debt was in dispute
A contested charge, such as a membership fee after cancellation, is listed as a default anyway. Evidence that the debt was genuinely disputed at the time can be relevant under the credit reporting rules.
A default listed with the wrong amount
A credit-card default is recorded for an amount that does not match what was owed. Credit information must be accurate, up to date and complete, and you can ask for it to be corrected.
Multiple defaults and duplicate enquiries
A file carries more than one default plus enquiries that look like the same application recorded twice. Each item is assessed on its own facts.
What the Law Says
Credit reporting in Australia is governed by Part IIIA of the Privacy Act 1988 and the Privacy (Credit Reporting) Code. Under section 6Q, default information can only be listed where a payment is at least 60 days overdue, the amount is $150 or more, and the credit provider has given written notice asking for payment. Section 21D requires the provider to notify you before it discloses the default to a credit reporting body.
You have the right to ask a credit provider or credit reporting body to correct information that is inaccurate, out of date, incomplete or misleading. Where a listing was not made in line with these rules, it may be disputed. Where it was made correctly, it generally stays for its full retention period.
How ACS Approaches a File
Solicitor review
Our solicitor, Elisa Rothschild (BA/LLB), reads the full credit file against the Privacy Act 1988 and the Privacy (Credit Reporting) Code
Honest assessment
If a listing was made correctly, we tell you so rather than taking the file on
Formal dispute
Where there appear to be grounds, we set them out in a formal dispute to the credit provider or credit reporting body
Free assessment
The first look at your file is free and there is no obligation
Does One of These Sound Familiar?
Start with a free, no-obligation assessment. We will look at what is listed on your file and explain whether there appear to be grounds to dispute any of it.
Disclaimer: The scenarios on this page are general examples for information only. They are not client stories, do not describe any result and are not legal or financial advice. Every matter is assessed individually, and outcomes depend on the creditor's response and are never guaranteed. Australian Credit Solutions Pty Ltd holds Australian Credit Licence 532003.