Government is establishing system that will see Barbadians for the first time being able to get local credit scores and reports, and Minister in the Ministry of Finance Ryan Straughn has sought to assure that their financial information will be kept confidential.
The passage of the Fair Credit Reporting Act on Tuesday, brought the Mia Mottley administration closer to establishing a credit reporting system under which individuals will have access to free credit reports, the contents of which they will have a right to challenge.
The legislation provides for the creation of a regulatory environment to promote the development of a fair credit reporting system in Barbados; the regulation of the use of such data; and the secure keeping of the private data of persons collected by credit bureaux. The Central Bank of Barbados will be the regulator.
Straughn, who introduced the Bill in the House of Assembly, said while credit information providers – including commercial banks and other financial institutions, businesses that offer hire purchase, utility companies, Government departments and other entities with which individuals and businesses do financial transactions – will share information on debt obligations to determine individuals’ credit worthiness, that information will be kept secure.
“There is nothing in this arrangement that would cause me to know how much money you owe to anybody or for you to know how much money I owe anybody,” Straughn said.
“[Neither] Government nor anybody is going to know anything about anybody’s individual business unless you have cause to have to come to us for a specific reason, [such as] in a normal bankruptcy or insolvency process, where if you’re going through that process with creditors you have to come with your open book and show everybody at the table what is at stake.
“At the end of the day, confidentiality and trust [are] paramount for the system. And, therefore, within the context of this Bill, there are very, very clear guidelines with respect to how those things will be treated,” Straughn added.
Under the legislation, a credit bureau that discloses information without consent is liable, on summary conviction, to a fine of $50,000.
Additionally, any person who obtains credit information from a credit bureau by deception could face a similar fine or be imprisoned for three years, or both. That penalty also applies to a credit bureau or user that discloses information about credit given to an individual or business or retains that information for a period longer than seven years after the date the credit was settled.
Minister Straughn said Government will roll out a public campaign next year to educate individuals and small businesses on the system.
He stressed that Barbadians will not be passive participants.
“All of us every year will be entitled to a free credit report that we can challenge,” he said. “If there is anything in your credit report that you know not to be true, then the provisions here allow for you to challenge the persons providing that information to the credit bureau to have it changed.”
Against that background, Straughn cautioned Barbadians to be careful how they engage with others on social media and to ensure they protect their identity.
He said this would be particularly important in the coming credit reporting system.
The Minister drew reference to cases in which fraudsters on social media have created fake profiles in the names of government officials in order to get people’s personal information.
“If you or I voluntarily click on some link that we see on Facebook or Instagram or WhatsApp or anything that is purporting to request information for a grant from government or whatever, and we give every bit of information that allows Ossie Moore – and I use the Ossie Moore term generically – to go and apply for credit in [your or my] name… and the bank or whoever is going to call asking why I didn’t pay back the money.
“I can’t underscore how important it is that Barbadians do not supply their personal information to random people on the Internet because the consequences could be very dire because when it comes time for you to get your credit score from the credit bureau, you see $100,00 or $50,000 that you know nothing about….,” Straughn warned.
The Minister also disclosed that the legislation will facilitate cross-border credit reporting so information can be used outside of Barbados.
“If you’re desirous of moving to Antigua or Jamaica or Trinidad or any other part of the region… the credit report you have in Barbados would then go with you into that jurisdiction that allows the financial institutions in that jurisdiction to know who you are.
“And, technically, if you are a business and you are finding it difficult getting credit in Barbados, you can indeed provide your report to another institution operating in another space… and you can then source financing from within the context of the region,” he explained.
Minister Straughn described the Credit Reporting Bill as a “monumental intervention” and “part of a suite of legislation that we believe, all taken together, will indeed create the environment where there will be growth accelerated in the country”.
He said it would not only allow people to access loans more easily, but would also prevent people from taking on more debt than they can handle.
“Right now, I can apply for five credit cards at five different institutions and none of them know that I applied at the other. The intent for this legislation is to also help people to be advised by financial institutions to make better arrangements,” Straughn said. (DP)
