Bill requiring credit-reporting agencies to obtain consent passed

KUALA LUMPUR: The consent of an individual will needed before his financial information can be displayed by credit-reporting agencies, under the Credit Reporting Agencies Bill 2009 passed by the Dewan Rakyat on Tuesday.
The agencies will also be required to provide correct and up-to-date information on consumers' financial information.
The Bill clarifies the roles and responsibilities of such agencies, which have been criticised for wrongly blacklisting the names of borrowers seeking loans from financial institutions.
Deputy Finance Minister Datuk Dr Awang Adek Hussin said the agencies will have to be officially registered after a three-month grace period, when the Act comes into force later.
He added that the five credit reporting agencies that needed to be directly registered were Credit Tips Off Sdn Bhd (CTOS), SME Credit Bureau Sdn Bhd, RAM Credit Information Sdn Bhd and Bradstreet FIS.
Awang Adek said the Finance Ministry will appoint a registrar of credit-reporting agencies, who will ensure that the agencies and other companies are registered with the ministry and their databases checked regularly.
He added company directors who fail to register their agencies may face a RM1mil fine or 10 year's jail or both.
"The companies will each need to have a paid-up capital of RM1mil and this can be increased by the minister from time to time," he said in winding-up the debate on the Bill at the committee stage.
However, he said exemption was given to the Central Credit Reference Information System (CCRIS) because it has been placed under the Bank Negara Malaysia's supervision.
Awang Adek said the activities of the credit-reporting agencies will also be checked through other provisions under the Companies Act and the recently-passed Personal Data Protection (PDP) Bill 2009.
"The onus is on the credit-reporting agencies to prove that they have taken reasonable steps to provide the correct and up-to-date information in their database. This is to prevent problems of incorrect information on consumer financial information through unverified sources.
"Further protection will be provided for consumers because the database will be kept by the agencies for only two years, after which the information will have to be deleted.
"The consent of consumers must be obtained first before the data collected by the credit reporting agencies is given out or displayed to anyone else. Consumers have the right to inspect the data and give their consent for the data to be displayed or otherwise," he added.