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Aussie John contests data grab claims

AAP

AAP

Consumers are being told to avoid a new website that provides free credit reports to prospective borrowers because of concerns that their credit information may be used for direct marketing by a mortgage broker and its business partners.

Last week Aussie Home Loans launched www.creditsavvy.com.au in association with international credit reporting bureau, Experian.

People who register with the site can apply for a free credit report generated by Experian and receive regular updates when details of their credit records change.

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Aussie Home Loans, which is partly owned by Commonwealth Bank, has pumped $3 million into setting up the online service.

The website is being promoted as “a free consumer initiative from Aussie”.

However, an inspection of the website by The New Daily indicates that personal credit information gathered by the service will be used by Aussie Home Loans to market credit and other financial products to users.

AAP

Aussie John’s nephew James Symond, CEO of Aussie Home Loans. Photo: AAP

The site’s privacy policy states that customer information might be used to market financial products to people who have used the site:

“We may use personal information and credit reporting information We collect about You to provide direct marketing offers on products and services We think may be of interest to You, unless You tell Us not to. This may be in the form of an email or other electronic means.”

This is a controversial disclosure because Aussie appears to be claiming a right to use credit reporting data about site users for marketing purposes.

National privacy laws specifically prohibit credit histories being used by licensed lenders for targeted sales campaigns. While Aussie holds a credit licence issued by the Australian Securities and Investments Commission it operates as a mortgage broker, not as a lender, and is not be subject to the same restrictions as lenders under the Privacy Act.

Aussie Home Loans chairman John Symond told The New Daily that his company had no intention of using the credit profiles of site users for marketing.

“Aussie and CBA get none of that data, it all goes to Experian,” he said.

“That’s a very important point.”

When The New Daily alerted Mr Symond to the disclosure in the website’s privacy policy, he said: “We’ve got no strategy to do that.”

Creditsavvy executive defends website’s use of data

Mr Symond referred The New Daily to the general manager of creditsavvy.com.au, Dirk Hofman, to clarify the meaning of disclosures in the privacy policy.

Mr Hofman denied that credit reporting information would be used to market financial products to customers.

“The information does not leave our website, we’re not selling it on,” he said.

“We don’t pass any credit information to Aussie or any other third party.”

However, Mr Hofman confirmed that an email list of site users would be used to promote loan products.

“At some stage one of our partners might think it’s a great channel to sell a product whether it’s a credit card transfer or whatever it may be,” he said.

“They will not see the list of users.”

Mr Hofman said that creditsavvy.com.au operated at arm’s length from Aussie Home Loans at its own offices in The Rocks district of Sydney even though it was a fully-owned unit of the company.

The creditsavvy.com.au business does not have a separate corporate structure, with disclosures on the website describing the operation as a trading name for Aussie Home Loans.

Mr Hofman refused to say how many people had requested credit reports since the site was launched last week.

“For commercial reasons we can’t go into that detail,” he said.

“We’ve had some great feedback, so far.”

Advocates warn consumers

Consumer groups are urging people to avoid the website by requesting their credit reports directly from credit reporting bureaus.

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Katherine Lane, the principal solicitor at the NSW Financial Legal Rights Centre, said that in privacy terms people using the site were paying a high price for a free report as they were likely to be bombarded with product offers.

She also highlighted that privacy laws gave all Australians a right to free credit reports.

“My recommendation is to avoid Credit Savvy and just apply for your credit report for free through Veda, Experian and Dun & Bradstreet,” Ms Lane said.

“I should stress every individual in Australia is allowed a free credit report every 12 months.”

Ms Lane also questioned whether a credit report sourced from one credit bureau would be of much use to people shopping for a loan because it was often the case that bureaus held markedly different information about a borrower’s credit record.

“It is more than possible that an individual will check their Experian credit report and find no problems but there is actually a listing on their Veda report.”

“It makes it very difficult for the public to work out who to check with.“

Mr Hofman acknowledged that no single credit bureau could give a complete view on how all lenders were rating individual borrowers.

“None of the bureaus will have the full picture and we need to be realistic about that,” he said.

CHOICE spokesman Tom Godfrey said consumers should always be wary of product providers marketing free services.

“Regardless of what a company claims, always read the terms and conditions to see what you are really getting yourself into,” he said.

“Very few things are ‘free’ in life.

“Consumers need to watch out for apparently ‘free’ services, which can be little more than a way of collecting your information with a view to selling you something.”

*For details on how to get a free copy of your credit report without compromising your privacy visit the Australian Retail Credit Association’s information portal here.

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