#BTEditorial – Much still to know about Fair Credit Reporting Act

Government’s introduction of the Fair Credit Reporting Act, which came into force in 2021, ostensibly aims to provide transparency and standardization in credit reporting activities.

However, for legislation that has such significant implications for Barbadians, there is still too much that members of the public do not know about the legislation.

The Central Bank of Barbados has been playing the lead role in the dissemination of information about the legislation using various platforms and forums.

Secretary to the Board of the Central Bank, Mr Elson Gaskin, in a statement released by the Government Information Service, sought to reassure Barbadians that their credit information, for example, would not be collected or shared either domestically or overseas “without the consent of a data subject”.

But there remains a big question. Who is regulating the data collectors gathering such important information about every Barbadian who seeks any kind of credit from institutions that range, from your car and home insurance providers to your hire purchase accounts, to the mortgage with your bank or credit union?

If there is an error in your credit score, who do you complain to about the matter? For how long is the information kept and how secure is that personal data?

Moreover, is the credit information protected under the island’s Data Protection Act? Do individual Barbadians have a right to have credit information about them deleted and can we stop a credit bureau from sharing the information with entities outside of Barbados?

Then there is the question of how do you go about repairing a bad credit score.

The credit reporting laws actually compel entities that offer credit to provide credit information on customers and clients. They then provide that information to credit bureaus, who create a credit score on individuals and entities.

The credit score seeks to provide a picture about an individual’s ability to repay their debt. In a world that runs on credit, from student loans, credit cards, store cards, house and car insurance, personal loans, mortgages, and vehicle loans, one can imagine that with an unhealthy score, a person could become shut out from obtaining credit.

While Mr Gaskin points out that persons’ credit information would not be collected or shared either domestically or overseas “without the consent of a data subject”, it is important to note at the same time, “you may not always be explicitly asked to do so; your consent could also be part of the agreement you sign”.

In addition, there may also be signs on the business’ premises or a note on their website, or credit reporting may also form part of the condition of persons utilising the entity’s services.

Despite the efforts so far to increase the level of public awareness, which we are persuaded still fall far short given the importance of the legislation, there needs to be a renewed push to sensitise Barbadians.

We are convinced that if you met 50 Barbadians on the street and asked them about the Fair Credit Reporting Act and its implications for them, 95 per cent or more would be in the dark.

We are concerned that people who may be worried about facing higher than normal interest rates or face significant barriers to accessing credit because of a low credit score, that this could fuel the creation of a black market and undesirable activities that come with such an environment.

Loan sharks do not only exist in the movies. When people feel shutout from established and reputable entities to obtain loans and credit, they will search elsewhere, where legitimate regulators do not exist.