ASIC and ACCC jointly published Regulatory Guideline 96 in October 2005 with the intent of introducing some uniformity across Australia. These guidelines are available for download at:

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/ACCC-ASIC_Debt_Collection_Guideline.pdf/$file/ACCC-ASIC_Debt_Collection_Guideline.pdf

Debt defaults. A default is generally indicated where there has been non payment, on agreed terms, in excess of 60 days. This is particularly so in regard to payments due in respect of credit card minimum payments, store accounts, personal loans and merchant accounts and telephone accounts. A 60day default on secured debt may result in repossession subject to the conditions set out in the Uniform Consumer Credit Code.

Effects of a default. A default is a contractual breach of the contract with the lender, however when we discuss a default it is usually referring to annotations on credit files and the damage that such a listing can have on future applications for credit.

Who can list a default? In personal credit matters, Veda Advantage (previously known as CRA and Baycorp) are by and large the largest provider of credit file information. Virtually every lender will conduct a search of your file to ascertain any defaults and check your history.

However, anyone seeking to obtain information about you must:

• have your permission to undertake this check. Permission is normally given in the fine print of credit applications which require your signature.
  • be a subscription member of the credit file company.
  • have a valid reason for seeking the information.

Default listings may be annotated by those persons with whom your have defaulted but generally they must be a subscriber.

A debt may be owed to the local plumber or electrician. Is it highly unlikely that a check would be made before granting credit, although by no means impossible. It is unlikely that a default would be annotated in these circumstances if you were to default.

Risk to the lender. Credit file information, provided by the credit reference bureau, is highly valued by lenders for the following reasons:

• It confirms your personal information, including previous addresses and occupations;
• It lists all of the credit applications you have made in the previous 5 years;
• It lists defaults that have been annotated in the past 5 years;
• It shows any court judgments or acts of bankruptcy.

All of this information is either available from public records or is information provided by lenders.

Finding out! A credit reference bureau is required by law to provide you, upon written application, a copy of your credit file information. Normally to obtain your credit file at no charge it takes some 21 days. For a fee it will be mailed to you.

Everyone should be aware of their credit file information and check it annually.