A $25,000 lesson in record keeping

It is absolutely vital that organisations maintain accurate personal information about their customers and deal with any inquiries relating to that information effectively. In a recent Human Rights Review Tribunal decision, Orcon was forced to pay $25,000.00 in Privacy Act damages after referring a $208.58 debt to a collection agency.

Background

Following delays in having his internet services connected, an Orcon customer (Mr Taylor) contacted Orcon to cancel their account. He was told that all charges were waived, and nothing remained owing. However, Orcon continued to send notices claiming amounts were still payable.

Despite Mr Taylor disputing the notices, the matter was referred to Baycorp. After further investigation by Orcon several months later, Orcon decided to raise a goodwill credit of $158.48, leaving a $50.10 debt. Baycorp then registered the debt with a credit reporting agency.

After Mr Taylor unsuccessfully applied for various rental properties and to financing companies, he discovered that his bad debt with Orcon was the reason he was being declined. At the Tribunal, Mr Taylor claimed that his privacy had been breached. He argued that the information Orcon relied on was used without them taking steps to ensure it was accurate, up to date, complete, relevant and not misleading. If this was the case, and the breach had caused financial or emotional harm, Mr Taylor would be entitled to damages from Orcon.

The decision

The Tribunal had little difficulty establishing that Orcon was in breach. Orcon had been put on notice of the disputed information, and had not undertaken an effective investigation before passing that information onto a credit reporting agency. There was also evidence that Mr Taylor had suffered financial and emotional harm. Orcon was ordered to pay $10,000.00 for the effect this breach had on Mr Taylor finding accommodation and credit, and $15,000.00 for personal humiliation.

The Tribunal also made an order requiring Orcon, at their expense, to provide internal training to staff on their obligations under the Privacy Act.

Conclusion

The decision highlights the importance of making sure any personal information held by an organisation is correct, and that processes are in place to deal with any queries. This is not only important for those that use debt collection agencies, but for any organisation that holds personal information.

This decision could mean that more organisations will be held liable if their privacy policies are not up to scratch.

If you are unsure about your privacy obligations, or have any other questions on this decision, please contact Lane Neave.

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