Recently the Australian Privacy Act was subject to an overhaul that many of us didn’t really think twice about.
But there have been a few key changes that have significant repercussions for the every day Australian – not to mention someone struggling financially after a life changing event.
Luckily, we’ve got you covered – here’s what you need to know.
What are the Privacy Act changes?
There are 3 aspects to the Privacy Act changes that are relevant to the average Australian:
1. Companies that collect your information (through mailing list sign-ups, for example) are now required to keep your information more secure.
2. These companies are subject to bigger penalties if they fail to follow the guidelines.
3. Companies are also required to report more information about their consumers and their activity, meaning that financial institutions will know more about your financial history.
How does this impact me?
Before the Privacy Act changes came into effect, your credit rating was primarily based on defaulted payments and loan applications. However, the new Privacy Act gives financial institution greater access to your financial history.
Every payment that you do or don’t make will be recorded and kept on file for two years.
This can be a good thing when you are able to pay bills on time and manage your accounts well. But, it has negative consequences if you are late on your payments. Specifically:
- Any payment that is more than 5 days late will be recorded and marked on your file for 2 years.
- Any bill or repayment that is more than 60 days late and exceeds $150 will be automatically recorded as a default on your record.
Paying the odd late bill didn’t directly impact your financial history in the past – usually you were just charged a bit more by your supplier or creditor. Now, every forgotten or procrastinated payment will stay on your record.
What should I do?
These changes ultimately mean that it is crucial for you to stay on top of your expenses and make sure that everything is paid on time. Do your best to clear your bills as soon as they arrive, and don’t let them sink to the bottom of the pile.
When money is tight, it also means maintaining a clear relationship with your creditors or suppliers. Most companies have hardship systems set up to help people who are in financial trouble. You can arrange to freeze your mortgage payment, or repay a bill in installments rather than one lump sum. These options will help you to avoid a mark or default on your credit record – but also require you to be proactive about seeking support. Take the first step by learning more about hardship officers here the ASIC website.
