Credit reference agencies and their role in council tax collection
As we all know Council Tax has been frozen for at least three years, this might seem a good thing but it will have a colossal impact on public services, on the jobs of public sector workers and on their spending power which will in turn impact on other low paid workers and their jobs. And as services are centralised there will be less accountability and if and when the private sector takes over public services, costs will inevitably sky-rocket.
Apparently the freeze has had such an effect on Bristol City Council that they are now spying on residents claiming single occupant discounts, using the credit reference agencies to determine how many people live at an address. Last August David Cameron urged local councils to do this so in the interests of transparency, a favourite word with the ‘big wigs’ who run the credit reference agencies, the council wrote to those people claiming or renewing their discount, warning that further checks would be made.
They are now checking with at least one credit reference agency and if they are told more than one person lives at the property the council tax payer is sent an intimidating letter which refers to the councils’ internal records and to an unnamed external credit reference agency who has supplied the information.
If the council believes other people do live at the same address they can investigate further, though it is not clear how, since it is the council tax payer not other residents who are being investigated. Perhaps they intend to make on-spec visits or use surveillance tactics.
Interestingly for council tenants, the public part (your name and address etc) of your credit report can be shown to other people e.g. landlords but only if you request this. Also there is an indication that the council should have reason for believing a fraud is taking place before they check, thus the reference to their internal records in the letter.
All these issues are up in the air at the moment so watch this space!
It is relatively easy to obtain credit from an address other than your own and despite recent claims made by Owen Roberts of Call Credit, that they can say with ‘a degree of certainty’ how many people live at an address, credit reference agencies do frequently make mistakes when providing information. When they do it is YOU who are responsible for correcting that mistake.
Most people are familiar with the credit reference agencies as they’ve probably taken out some kind of loan in the past and have been checked through Experian or one of the other two main agencies, Equifax and Call Credit. Up to around ten years ago people applying for credit were often turned down because their address was black-listed due to other residents, past and present, accumulating debt or receiving a county court judgement. Then the rules changed so that actual credit checks only show the credit rating of the individual in question.
This was an improvement to an extent but when people apply to see information held on them they don’t have access to the names of people who supposedly live at the same address. Additionally they do not disclose who, other than creditors, are asking for information. With this lack of transparency, the council might make a mistake as to what they’ve been told but you’ll never be able to show this.
Lastly Experian claims to have ‘rolled out’ information to over 300 councils so far but how those councils choose to use that information is their responsibility. With data protection issues coming into play I suspect a ‘can of worms’ will open and many legal challenges will follow.