At present, Hong Kong has an effective legal framework for safeguarding personal privacy in relation to consumer credit data. The use of recorded information relating to an individual's credit transactions is regulated by the Personal Data (Privacy) Ordinance and the Code of Practice in Consumer Credit Data. In light of the considerable increase in the default rate on loans and credit card spending, the financial industry proposes relaxation to certain provisions of the Code, particularly a greater sharing of positive credit data via a credit reference agency, as a measure to contribute towards alleviating the problem of growing consumer indebtedness and personal bankruptcies.
The provisions of the Code provide a framework for the sharing of negative consumer credit data. Negative credit data refers to information only on an individual's default record. It has been reflected by the industry that sharing only of negative credit data is insufficient for credit assessment purposes, as it does not record a borrower's total indebtedness and credit history. Positive credit data, on the other hand, refers to information on an individual's credit exposure, such as their number of facilities, credit limits, outstanding amounts and monthly repayment records, other than residential mortgage loan.
Considering the industry's proposal, a fair and reasonable balance should be struck between public interest and the privacy interest of the borrowers. In this regard, the Privacy Commissioner for Personal Data has recently issued a consultation document to seek the public's views on the proposed provisions. The public consultation period on the amendments to the Code will end on October 25 2002. If the proposal is adopted after consultation, credit reports with borrowers' repayment records during the past 24 months will be available to certain credit providers. Personal information such as personal income, deposits, other assets and non-credit related information would not be shared.