Commercial credit providers breathe a sigh of relief

Commercial credit providers have been granted exemption from EDRS membership.

Commercial credit providers have been granted exemption from EDRS membership.

Since March 2014 commercial credit providers (CCPs) have been anticipating having to register with an external dispute resolution scheme (EDRS) by the deadline of March 12 this year. With the Attorney General's Department (AGD) having committed to providing a solid direction before the deadline, we have now been provided with a solution.

Huge privacy reforms in March last year required many businesses to sign up with EDR schemes. However, CCPs and some other businesses were given temporary reprieve for 12 months.

Under the Privacy Amendment (External Dispute Resolution Scheme-Transitional) Regulation 2014, CCPs and businesses that were involved with the retail sale of certain utilities (electricity, gas, sewerage, etc), were able to engage in an ongoing discussion with the government while under exemption from registering. The goal was to establish either permanent exemptions or privacy-only EDR schemes that were more applicable to certain industries that were not covered by current schemes.

CCPs, of course, are those providers who deal directly with businesses, not consumers. The exemption for utility retailers is, in fact, directly related to the interaction between the business and end consumers, and any credit reports that may be required before services are rendered.

The reason utility providers have an exemption currently, is that many states have an ombudsman service which fulfils the role of an EDRS. 

On the other hand, CCPs were up for inclusion in the EDRS debate because they access consumer credit reports when dealing with commercial credit applications. However, the counter-argument has been that commercial suppliers of credit do not otherwise engage in the credit reporting process.

The Attorney General has put forward an amendment regulation to implement a permanent exemption for CCPs from EDRS membership, to take effect from March 12. The regulation was approved by the Executive Council on February 26, officially passing into law.

This exemption is only applicable in the course of providing commercial credit, meaning that ultimately, consumer privacy is still protected. This logical conclusion to the discussion around EDRS membership is a win for all involved.

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