FORMER PRESIDENT of the National Consumers' League Carlton Stewart has cautioned against the treatment of consumer information by proposed credit bureaux.

The Government is moving to establish credit bureaux by passing credit reporting legislation.

The bill is now being examined by a joint select committee of Parliament.

The credit reporting mechanism will be part of the financial sector reform programme.

This mechanism, according to the memorandum of objects and reasons of the bill, is a critical element in strengthening the regulatory framework of the financial sector.

It is a precondition for a second loan from the World Bank in support of the reform programme.

Making a submission to a joint select committee in Gordon House last Thursday, Stewart said the treatment of consumer information by credit bureaux could have serious implications for consumer privacy, security, credit rating and monitoring.

He told legislators that firms offering credit and government agencies could not always safeguard consumers' private financial information and, as such, data could be stolen. Stewart argued that identify theft was one of the fastest-growing crimes in developed countries.

The consumer advocate said that sensitive information such as consumers' Tax Registration Number must be protected.

Data security breaches

"Consumers must have access each year to one free credit report and businesses must inform consumers about data security breaches," he said.

He said financial institutions must be barred from sharing or selling "personal identifiable information without obtaining the consumer's consent.

"There must be serious penalties for trafficking in personal information," he recommended.

A credit-reporting system would serve to provide a credit history of borrowers to allow for better credit assessment, risk management and loan pricing. It would also provide credit facilities to more Jamaicans.