Company accused of reporting inaccurate information to credit bureaus

PIPEDA Case Summary #2003-125

[Principles 4.9 and 4.9.5 of Schedule 1]

Complaint

An individual complained that a telecommunications company reported inaccurate information about him to the credit bureaus and refused to take appropriate corrective action when the inaccuracy was brought to its attention.

Summary of Investigation

In 1996, the complainant opened a cellular phone account on behalf of his company. At the time, he was the sole owner and director. He later left the country on business, during which time a relative was in charge of the business. The relative did not pay the phone bill, and the telecommunications company disconnected the service and referred the outstanding balance to a collection agency. It reported an R9 credit rating, which means "bad debt: been referred for collection," on the complainant to the credit bureaus. When the complainant returned to the country, he paid off the outstanding balance. The relative wrote to the company, accepting responsibility for the R9 credit rating and requesting that the credit reporting be transferred to him.

In 2001, the complainant was denied a loan from a bank because his credit bureau report indicated that there was an outstanding amount owing on the original account with the telecommunications company. He contacted the company and requested that this error be corrected. The company advised the credit bureaus that the balance had been paid; however, it continued to report that the repayment history warranted an R9 rating.

The complainant remained concerned about the R9 rating on his file. He argued that the information regarding his company was corporate, not personal, information. Therefore, if the company had failed to pay its cellular phone bill, the poor credit rating should have been applied to the company and not to him as an individual.

The complainant had signed the application form in his name, not the company's, gave his personal credit card as a guarantee, and gave the company permission to check his personal credit history to determine if he was a good credit risk.

Alternatively, the complainant argued that if the poor credit rating had to be assigned to an individual, then it should be assigned to the person who was responsible for failing to pay the account. He argued that the company knew that the relative was responsible because of the letter that was sent earlier, and that the company had decided not to accept that letter, instead demanding a notarized letter from both the complainant and the responsible party.

The company maintained that it could only transfer the credit rating if it received a notarized letter from both parties to protect itself from any potential liability.

The complainant and his relative eventually sent a notarized letter to the company, which then removed the R9 rating from the complainant, transferred it to the relative, and modified it to R5.

Commissioner's Findings

Issued March 4, 2003

Jurisdiction: As of January 1, 2001, the Personal Information Protection and Electronic Documents Act (the Act) applies to any federal work, undertaking, or business. The Commissioner had jurisdiction in this case because a telecommunications company is a federal work, undertaking, or business as defined in the Act.

Application: Principle 4.9 states that, upon request, an individual shall be informed of the existence, use, and disclosure of his or her personal information and shall be given access to that information. An individual shall be able to challenge the accuracy and completeness of the information and have it amended as appropriate. Principle 4.9.5 goes on to state that when an individual successfully demonstrates the inaccuracy or incompleteness of personal information, the organization shall amend the information as required. Depending upon the nature of the information challenged, amendment involves the correction, deletion, or addition of information. Where appropriate, the amended information shall be transmitted to third parties having access to the information in question.

The complainant exercised his right under Principle 4.9 to challenge the accuracy of his personal information. He first successfully showed that the payment on his account had not been properly posted. The Commissioner was satisfied that the company acted in accordance with Principle 4.9.5 when it corrected this information and reported the change to the credit bureaus.

As for the credit rating that the company continued to report, the Commissioner did not accept the complainant's claim that the rating should have been applied to the company instead of to him personally. He cited the complainant's signature on the document, the use of his personal credit card to guarantee the account, and his agreement to a personal credit check as evidence that he had personally guaranteed the account.

He also did not accept the complainant's argument that the company should have known that the relative was in fact responsible for the debt. The Commissioner indicated that it was reasonable for the company to maintain the reporting on the account until it was satisfied that the complainant was not the responsible party. He determined that it was reasonable for the company to request a notarized letter signed by both the complainant and the relative before changing the rating. The Commissioner was satisfied that, once the company received the required information, it changed the reporting and transferred the information to the credit bureaus, in accordance with Principle 4.9.5.

The Commissioner therefore concluded that the complaint was not well-founded.