RECENT CHANGES in the law have severely restricted tracers’ access to legitimate sources for tracking down debtors.
Tracing agents have been under pressure over the past few years, facing tighter controls over what they are allowed to do to find debtors. One of the biggest blows to the industry was the Data Protection Act 1998 or, as it is known by creditors and tracers alike, ‘the debtor’s charter’.
Its underlying principle is that data should be obtained fairly and without deception. However, since its implementation good tracing agents – who were able to trace 70% of debtors – found their success rate dropped significantly to just 50%.
For example, the Association of Chief Police Officers has decided to evoke the Data Protection Act to its limit and refuse to talk to investigators. When thefts of motor vehicles are reported the police do not attend, but merely note the details and provide a crime number.
Because of the attitude of the police and the Home Office, many insurance companies now no longer bother to have dubious claims investigated. It is known, unofficially, that insurance companies have decided to pay out on most claims and simply pass this on to their customers by increasing their premiums.
The Data Protection Act 1998 contains eight data protection principles. These require that personal data should be:
• Fairly and lawfully processed.
• Processed for limited purposes.
• Adequate, relevant and not excessive.
• Accurate.
• Not kept longer than necessary.
• Processed in accordance with the data subject’s rights.
• Secure.
• Not be transferred to countries outside the European Economic Community without adequate protection.
On the face of it these ‘principles’ would appear to be reasonable conditions.
However, ‘fairly and lawfully processed’ is the most important to be considered by any person involved in tracing debtors. Personal data should be fairly and lawfully obtained. The definition of ‘lawfully’ is obvious to us all, but how would we each define ‘fairly’ as applied to this context?
The previous Information Commissioner, Elizabeth France, in her Data Protection Guidance, Debt Tracing and Collection (July 1997) sets this out.
She clearly indicated when defining the first principle that the gathering of information by deception was unacceptable. Her policy was very strongly supported by her successor’s statements.
Information fairly obtained
In most cases information is obtained fairly if the person supplying the information is aware of:
• The identity of the data user.
• The purpose to which the personal data may be used.
• Any proposed disclosure of personal data.
“This information or notification should be clearly provided and, though it need not be very detailed, should put the person from whom the information is requested in a position to decide whether he or she wishes to supply any,” said Elizabeth France.
This clearly outlaws the use of a pretext or deception when obtaining information. In other words lying to obtain information would appear to be immoral and unfair.
Blaggers face unlimited fines and imprisonment Richard Thomas, who succeeded Elizabeth France last November, clearly outlined his policy in respect of private detectives and journalists who ‘blag’ confidential details from banks and telecom companies. They will face unlimited fines and possible imprisonment. He said some of the worst cases involved tracing agents who have stolen tax details by impersonating an individual and conning Inland Revenue officials into making wrong disclosures.
Mr Thomas, who is also a solicitor, went on to say that his team was working with Revenue and Customs and Work and Pensions officials in investigating a number of un-named cases of information stealing.
These allegations involve the sale of personal information which had been obtained through the impersonation of an individual; of fraud which he described as ‘blagging’.