Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I beg to move amendment No. 25, in clause 25, page 18, line 6, at end insert—

'(2A) It shall be the responsibility of individuals, partnerships, companies or organisations acting as credit information services as defined in section (7B0 of the 1974 Act, or acting as credit reference agencies as defined in subsection (8) of section 145 of the 1974 Act, to take all reasonable steps to ensure that the information which they store on any individual, partnership, company or organisation, and which they impart to a third party, is accurate, up-to-date, and gives a true reflection of the credit record of the said individual, partnership, company or organisation.

(2AA) Failure to take the steps identified in subsection (2A) shall give rise to the opportunity for the individual, partnership, company or organisation to seek compensation through the civil courts for the keeping of inaccurate information.'.

I attempted to address this amendment prematurely a few moments ago. It refers to credit agencies that store information on our behalf then pass it on to third parties when asked. I have always been concerned at how some of those companies operate, and I raise the issue seeking to strike a balance. As the Minister said, credit can be good and reasonable—for example, when people borrow for houses, motor cars or business purposes. However, many people cannot get credit or borrow money because of their credit references. It is important that people keep good credit records in order to avoid situations such as the tragic case that we   heard about earlier of the poor gentleman with 22 credit cards. That is undesirable, but it might have happened because of inadequacies in a credit rating system rather than the system being too prescriptive. I regret those situations, just as I also regret the fact that good and decent people of reasonably sound financial standing are turned down for credit.

We are all aware of how credit agencies work. Some years ago, just after I had moved house, I wanted to take out a short-term loan for some reason that I cannot remember. I was turned down, so I asked why. I was told that it was because of the credit reference. However, the credit reference had nothing to do with me; it concerned the people who had lived in the house previously. I examined their record, and it was disastrous. I could well understand why nobody wanted to lend them money. However, that was not my position. It was a very sloppy way to do business, and it could have become a problem for people who were trying to get credit at a time either of personal difficulty or, alternatively, at a time of great opportunity because their situation might have become worse or they could have lost that opportunity.

In other areas of life, the provision of incorrect information can often give rise to the right to seek compensation. Through this amendment I propose that credit agencies should be responsible for taking

''all reasonable steps to ensure that the information which they store on any individual, partnership, company or organisation and which they impart to a third party, is accurate, up-to-date and gives a true reflection of the credit record of the said individual, partnership, company or organisation.''

The amendment also proposes that

''failure to take the reasonable steps identified in subsection (2A) shall give rise to the opportunity for the individual, partnership, company or organisation to seek compensation through the civil courts for the keeping of inaccurate information.''

That is a departure from the present law—or the present lack of law. The issue concerns me greatly.

I do not know whether this is the best approach or whether my amendments are worded as well as they could be, but the issue must be tackled. It places no additional regulation or burden on companies. By analogy, other organisations such as banks, solicitors' offices or accountancy firms have a duty of care to the client. The question is: who is the client? A credit agency's client might well be the company that applies to them for the credit reference, but there is still a duty of care to the person on whom information is being kept.

Mr Gregory Barker (Assistant Chief Whip, Whips; Bexhill & Battle, Conservative)

My hon. Friend makes some excellent points. It is not just sloppy record-keeping that impacts on individuals: there is the more serious issue of fraud. We have already discussed the issuing of unsolicited application forms and credit cards. If that happens because of inaccurate data, it can give rise to fraud, and in certain cases individuals may have been caused great distress and may even have had to pick up bills. My hon. Friend's proposal has several benefits.  

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I thank my hon. Friend for that good point. In many ways it is more important than mine. The information may be inaccurate, the accounts may be sloppy, but fraud is also an issue. When I was in business, I had a dispute with a supplier who had given me faulty goods. I refused to pay for them, as was my right. The company took me to court, and the case was struck out. However, the credit reference company had recorded the case as a county court judgment against me—another instance of sloppy record-keeping. I only found that out while conducting another business transaction, and it became a problem. I told the credit company to remove the inaccurate information from its records. The company contacted Leeds county court, and it was taken off the record. However, on a subsequent occasion, the same credit reference company still had that judgment on my record, even though it was wrong. Given the amount of time I spent dealing with that problem, and the business opportunities I could have lost, because a company was saying things about me that were demonstrably untrue, I should have been able to say to them, ''I'm sorry, but you owe me some compensation. Not only have you done this once, but twice.'' That is the mischief that the amendment seeks to remove.

Mr Gregory Barker (Assistant Chief Whip, Whips; Bexhill & Battle, Conservative)

My hon. Friend makes a good point. He was able to handle a situation regarding inaccurate information. However, I have dealt with a number of such cases in my constituency of Bexhill, which has a large elderly population. Several of my elderly constituents become very distressed if they think that inaccurate information is being held on them, particularly when it is connected with debt or finance. These people live on small fixed incomes and have no margin of error in their household budgets. My hon. Friend's amendment would help.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I am grateful to my hon. Friend. Some people can deal with those situations, although that does not mean that it is not stressful, time-consuming and costly for them. However, other people are unable to deal with such problems.

The Data Protection Act 1998 gives people the right to find out what is on their record. However, as I found out, it is difficult to get the record changed—even for someone as bolshy as I am. There must be some form of redress if demonstrably wrong information is being released. That is the mischief that I seek to remove with the amendment.

Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)

I have some sympathy with the hon. Gentlemen's impressive and articulate double act to promote the case for the amendment, but I hope that I can reassure the hon. Member for Tewkesbury that his amendment is not needed. Although I agree that it is important that credit records are accurate and up to date, the objectives of the amendment are covered in large part by the Data Protection Act 1998.

In part I of schedule 1 to that Act, paragraph (4) states:

''Personal data shall be accurate and, where necessary, kept up to date.''

''Personal data'' means data relating to a living individual who can be identified from the data or   from other information that the data controller holds or is likely to obtain. That covers all data relating to individuals, sole traders and some partnerships. It means that companies holding credit records on those people are subject to the requirements of the Data Protection Act 1998.

Section 13 of that Act also allows a person to seek compensation if the Act is contravened. Section 159 of the Consumer Credit Act 1974 allows people to correct the information on their files. It is a criminal offence if someone has agreed to correct an entry and does not comply with that notice of correction.

The Data Protection Act 1998 does not cover information about companies and organisations. However, most credit records relate to individuals. The 1974 Act allows individuals, but not companies and other bodies corporate, to correct their credit records. Moreover, and perhaps more importantly, the Office of Fair Trading's licensing powers will allow it to take into account poor practices undertaken by businesses holding credit records, and that might form part of its assessment of fitness to hold a licence. The OFT may impose a requirement on the licensee if it is dissatisfied and believes that a requirement could improve matters.

Although I agree with the sentiment of what the hon. Gentleman is trying to achieve, the provisions of the Data Protection Act and the OFT's licensing powers are adequate. Therefore I ask him to withdraw his amendment.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I am pleased that the problem is in part covered elsewhere. However, I am still concerned as the Minister said that the provision relates only to individuals. Therefore although that provision is welcome, it needs to be extended. I do not wish to detain the Committee if, by and large, this point has been covered. However, I ask the Minister to consider, through this Bill or another bill, extending the provision to companies because, as I said earlier, a company can be one man or woman.

Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)

The whole of the Bill relates to individuals. The initial clause deals with the definition of ''individual''. It includes sole traders and partnerships consisting of three persons or fewer. There is an issue about credit references for business, but it is not applicable to this Bill. The hon. Gentleman asks me to examine that in another context, and I am happy to do that.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

Given the Minister's response, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 25 ordered to stand part of the Bill.

Clause 26 ordered to stand part of the Bill.