Inaccurate Personal Information: Key Lessons For Businesses

You must consider privacy responsibilities if your business collects personal information. Importantly, this includes ensuring that you do not disclose any inaccurate personal information to third-parties. This is because individuals expect that you treat data that is associated with their identity with care, such as their:

• name;
• address;
• phone number;
• medical records; and
• credit card details.

If Australian privacy law applies to your business practices, you will also have a responsibility to ensure the quality of the personal information you hold and disclose. Failing to do so can result in penalties that could harm your reputation and finances. This article looks at: 

• the obligation to hold and disclose accurate information; and 
• a case study on inaccurate personal information disclosure.

Personal Information Must Be Accurate

Australian privacy law is primarily governed by the Privacy Act (the Act). The Act applies to businesses with an annual turnover of over $3 million. 

It also applies to businesses that:

• hold health information and provide a health service; 
• contract with the Commonwealth; or 
• provide or receive a benefit for personal information. 

These tests are not exhaustive, so you should check whether any other factors outlined under the Act capture your business.

If your business does need to comply with the Act, you will need to consider the Australian Privacy Principles (APPs). Among other guidelines, these principles require that you reasonable steps to ensure that data you collect, use and disclose is:

• accurate;
• up-to-date;
• complete; and
• relevant.

This means that disclosing inaccurate personal information of your customers or clients can lead to harsh consequences.

What Are Reasonable Steps?

Whether your actions constitute taking reasonable steps will depend on the: 

• type of information you are collecting and disclosing; and 
• the circumstances around that collection or disclosure. 

You must consider several factors, such as the: 

• sensitivity of the data; 
• possible adverse consequences if it is inaccurate; and 
• time and cost involved in managing the data. 

Therefore, you must take reasonable steps to ensure the quality of personal information. This helps to protect individuals from incorrect information being held about them and disclosed to third parties, as this can harm their business and personal opportunities.

Case Study: Inaccurate Credit History Disclosure

The Office of the Australian Information Commissioner (OAIC) made a privacy determination against a major Australian bank in June 2019. This decision uncovered the potential consequence of disclosing inaccurate personal information. It also demonstrates the harsh penalties imposed against businesses that fail to comply with their privacy obligations.

In this case, an individual applied for several home loans with a variety of financial institutions. After each lender denied his applications, the individual brought a claim against the bank for interfering with their privacy. 

This is because the bank gave at least one of the other financial institutions incorrect information about the individual’s credit history. The bank suggested that the individual had not paid off their credit card debt. However, the debt had actually been transferred by the bank to a debt collection agency. The individual had then paid off their debt with the agency. 

The bank failed to record or share this extra information with the other financial institutions. Therefore, the OAIC found that the bank had breached the requirement to disclose personal information that is: 

• accurate;
• up-to-date;
• complete; and 
• relevant. 

In finding that the bank had breached the Act, the OAIC awarded monetary compensation of $15,000 to the individual. They also required the bank to issue a written apology and amend its: 

• policies;
• operation processes; and 
• procedures.

This demonstrates the harsh penalties that you could face for disclosing inaccurate personal information. Therefore, you should always take reasonable steps to ensure the information you share with third-parties is up-to-date and relevant.

Key Takeaways

If your business is required to comply with the Privacy Act, you will have an obligation to collect and disclose information that is:

• accurate;
• up-to-date; and 
• complete. 

You will need to take reasonable steps to ensure that the information you hold is correct. This will depend on what is considered reasonable for the: 

• type of information you are collecting; and 
• the type of disclosure you are making. 

If you fail to do so, you may be investigated by the OAIC for breaching your privacy obligations. This may include a fine and could harm your reputation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.