PIPEDA Case Summary #282: Excessive disclosures in the pursuit of a debt - October 21, 2004

Ther Personal Information Protection and Electronic Documents Act allows an organization to disclose personal information without consent in connection with the collection of a debt owed to that organization (see s. 7(3)(b) of the Act). This does not, however, provide blanket permission to disclose the debtor's circumstances and credit history in doing so. The Privacy Commissioner's office has just released finding #282, in which an individual complained about excessive disclosure during collections actions by a bank:

Commissioner's Findings - PIPEDA Case Summary #282: Excessive disclosures in the pursuit of a debt - October 21, 2004 - Privacy Commissioner of Canada: "An individual claimed that a bank disclosed a significant amount of his personal information to two of his employees without his consent. The complainant alleged that these disclosures were extremely damaging to his reputation and contributed to his decision to resign as the head of a company."

The complainant alleged, an produced compelling evidence, that the bank in question "had told [the complainant's employees] that the complainant’s account was severely delinquent, his credit card was suspended from further use, his payment history was sketchy, the bank was intending to enforce its claim against the complainant, and as part of that enforcement, was going to garnish his wages, which would be embarrassing for both the company and the complainant."

The Assistant Privacy Commissioner was not amused. She found:

• While acknowledging that an organization may disclose an individual’s personal information without consent for the purpose of collecting a debt, this exception did not confer, as noted in an earlier finding made by this Office, a carte blanche upon an organization to disclose however much information it wished in pursuing a debt.
  
• In this instance, there was clear documentary evidence, from the tape recording as well as from the sworn affidavits, that an excessive amount of information was divulged during the bank’s debt collection activities.
  
• The bank had stated that it was calling the complainant’s employees to verify his employment and that it was planning to garnish his wages. While the Assistant Commissioner acknowledged that an organization must disclose some information to an employer when seeking to garnish the debtor’s wages, in her opinion, the bank went too far in its attempt to recover the debt.
  
• There was no need to reveal the debtor’s payment history, the amount of money owed, or that the debtor’s credit card was suspended from further use, to name but a few examples of information that the Assistant Commissioner considered excessive.
  
• She thus found the bank in contravention of Principle 4.3.

In short, any organization collecting a debt may only disclose the minimum amount of personal information necessary. Any more, and you are likely offside.