The MFAA has updated its Privacy Module to clarify when a broker is able to obtain access to a credit report.  The Privacy Module has also been updated to reflect the requirements of the Lenders Mortgage Insurers (LMIs) and clarification around electronic commercial messages under the SPAM Act.

Access seekers

Previously brokers were able to access the credit reporting system as an agent of the borrower.  These agents are now called ‘access seekers’.  The Privacy Module and the broker consent have been updated to incorporate this new term.

The individual must provide written authorisation for the broker to access their credit report.

Most broker agreements impose an obligation on brokers to disclose to lenders any information which may adversely affect a finance application.  Prior to disclosing any adverse information contained in the credit report (such as defaults) to lenders, brokers should obtain specific consent to the disclosure from the applicant.  This consent is in addition to Privacy Consent signed by the borrower.  It need not be a formal or written consent.  What is required is agreement from the borrower to disclose this specific information to the lender which came into the broker’s hands as agent for the borrower and is otherwise confidential to the customer.

The broker may advise lodging the application with a different lender who may accept adverse matters of the kind disclosed in the report.  If the applicant does not agree to disclosure of the adverse information, brokers should not lodge any application because doing so without disclosing the adverse information will most likely put them in breach of their broker agreement.

Privacy Consents

The Privacy Consents for lenders and mortgage managers notify the borrower of certain matters.  These Privacy Consents have been amended in consultation with the LMIs to include the notifications the LMIs are required to make under the Privacy Act.

SPAM Act

The MFAA Privacy Module clarifies when a direct marketing communication is an electronic commercial message for the purpose of the SPAM Act.