A Christchurch company has no concerns about supplying credit checks on individuals over the Internet, despite Baycorp steering clear of such a service because of privacy issues.
Netcheck New Zealand believes it is the first in the world to provide credit checks on people over the Internet.
Baycorp set up a Web site late last year which provides information on corporate debtors, but Baycorp Holdings’ IS manager Garry Wood told Computerworld earlier this year that it would not provide credit information on people over the Internet because of privacy concerns.
Netcheck New Zealand has been set up by Greg Harkerss and Mike Dunlop, who operate Christchurch-based debt collection company Procoll Services, and Ian Kearney, a solicitor.
Managing director Harkerss says he doesn’t have any security concerns about providing information on individuals over the Internet.
“That was one of the major concerns about this, how to protect the database from somebody getting in and maybe changing records.”
Harkerss will not reveal what security protects the site, but says it is secure. “We have sufficient security measures so that break-ins don’t happen.”
He says the company spent months researching before it was happy to provide the information over the Internet. The majority of the set-up costs stemmed from how to protect the database. He would not say how much it cost, except that it was a six-figure sum.
“The pay-off will be in months to come.”
He says the companies using the system have to be members, and use a password to get access to the operation’s database. He says member companies have to show their inquiries are what he calls “Privacy Act compliant”, meaning that they will have the signed consent of the customers they are doing the search on.
He also says that the operation is consistent with the 12 principles of the Privacy Act. He says he hasn’t talked with the Privacy Commissioner’s office yet but does intend to release a statement to the office inviting it to look at the site.
“We’ve read the act inside out and backwards...We’ve done it by the book and the principles of the act.”
He says the operation’s database is made up of information sourced from Privacy Act compliant business and business people. He says most big companies get people to give signed consent, that should they default on a payment, that the company will be able to use it for credit reporting purposes and supply it to organisations like Netcheck.
Harkerss says Netcheck sources its information from that default information, and publicly available information such as district and high court judgements and public notices.
“We just gather it all together and put it on the database.”
The database also indicates when a past credit check has been done. Harkerss says if a person goes to one store for credit and is turned down, and then goes to another store, the database will show up that they had applied in another store five minutes ago.
He says Netcheck is aimed at wholesalers, retailers, finance companies and car dealers - any company which offers credit to individual customers.
The charges for companies using credit check are on a sliding scale - the more inquiries a company makes, the cheaper it becomes. Harkerss say the scale ranges from $1 to $4 an inquiry.
Harkerss has been unable to find any other sites which provide credit information on individuals over the Internet.
As well as the credit check information, the Netcheck site provides links to other sites such as the Companies Office, Valuation NZ and sites to search telephone numbers in Australia and New Zealand, and addresses in the United States.
The site has been running for six weeks, although the company has been in existence for 12 months.
“We’ve spent the last eight or nine months trialling it, testing it and making sure of the legal issues with the Privacy Act.”
He says the Internet provides the ideal tool for such a service.
“It’s great to be able to have everybody getting access to it around the clock. There’s no time limit to when you can use it, it doesn’t have to be nine till five.”
One aspect of the site which Harkerss believes won’t be able to go ahead is the one-off searches using credit cards. In practice it would have meant anyone could do a credit check on anyone else. He now says it’s unlikely that will ever get started.
He says there are about a dozen companies using Netcheck consistently at present, and the numbers on the database are in the low 10s of thousands.
Netcheck promotes “positive” credit information for individuals, allowing them to build a positive credit history and simplifying the process for credit providers.
“Only 10% of people run into trouble. Most people have good credit ratings.”
Harkerss says he would welcome people who are about to apply for credit somewhere to approach Netcheck to get their credit assessment up to date.
The company is only operating in Christchurch at the moment. As the business grows, it will expand nationwide - probably in the next six to 12 months.
“We want to walk before we run.”
With the Baycorp site, the data sent from customers to the site is protected by 40-bit encryption technology. Baycorp says the only way to decipher the data is through a public/private key that it has, and that this ensures hackers can’t intercept passwords and run up bills in a customer’s name.
Comment from the privacy commissioner’s office was unable to be obtained before deadline.