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Lord Higgins: I am tempted to read out what else the banks said about the noble Baroness's Second Reading speech, but I shall refrain from doing so.

We need to check up on the facts of the matter. There is clearly a considerable difference of opinion between the noble Baroness and the noble Lord on the one hand, and the British Banking Association on the other, as to what actually comes up on a screen in a petrol station when you present your credit card. Short of us all going off to the nearest petrol station and presenting a credit card, I am not sure how we can solve the issue immediately. No doubt we shall manage to do so.

The trouble with this argument is that I have now forgotten the second point made by the noble Lord.

Lord Grabiner: I cannot remember it either, so it does not really matter. But perhaps I may make this point. In a sense, it does not really matter if the address comes up. What has to be appreciated is that probably such transactions are carried out 200,000 or 300,000 times a day. The decision on whether or not to grant credit in respect of a particular transaction is the effect of a positive reaction from having put in the card. That is because a vast amount of information is immediately, in effect, interrogated and a positive or negative response is given. The essential point is that the information is already there, albeit in the private sector, which many of the provisions and amendments

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we are discussing illustrate. The legislation is designed to allow access to information which is already in the private sector and available at a price.

Lord Higgins: The second point made by the noble Lord was in regard to footprints. Again there seems to be a considerable difference of opinion. I am not clear whether the Government are arguing that there will be no footprints because the footprints are normally not recorded, or whether they are saying that if the DSS makes an inquiry it will ask for the footprint not to be there.

My understanding is that if you ask to see your credit rating, one of the pieces of information you get back is a list of all the people who have inquired as to what is your credit rating.

Baroness Hollis of Heigham: Perhaps I may address that point in a moment. These amendments seek to remove credit reference agencies from the list of organisations who would be required to provide information. As I said on the two previous groups of amendments, this would be a seriously damaging step as we envisage the agencies being our first port of call in many inquiries. If someone has a credit card, then going through the credit reference agency leads us to his bank. If he does not have that, we may need to go to the bank directly.

The amendments also seek to remove,

    "any body the principal activity of which is to facilitate the exchange of information for the purposes of preventing or detecting fraud",

from the list of organisations which would be required to provide information.

Perhaps I may deal first with the issue of credit agencies. The noble Lord, Lord Higgins, made two substantive points: first, that a person's credit rating could be harmed by the fact that the DSS had made inquiries about that person--in other words, an assumption about how credit ratings operate; and, secondly, that the DSS in particular would be leaving a footfall and that the situation should be clarified.

As I understand it, credit reference agencies do not award credit ratings; it is the financial institutions using their services who do that. I have assured the House that we will ensure that these organisations--the banks and so on--which use the credit reference agencies cannot identify whether or not the DSS made an inquiry when the department itself, in turn, accessed credit agency data. There is, therefore, no question of a person's credit rating being affected by our using these powers.

There may be some supplementary concerns about whether the information held is incorrect--I refer back to our previous discussions--but, again, no one piece of information convicts a person of fraud. Any incorrect information would soon be uncovered--it would be inconsistent--and it would be treated sensitively and securely destroyed.

Again there is a concern about people knowing the information. We debated this point in relation to the previous amendment. Only an authorised officer may

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obtain on-line information that relates to an identified person where there are reasonable grounds to do so. Any inquiry that would not be allowed in writing under Section 109B will not be allowed under these provisions. Such inquiries will have to be made in accordance with a code of practice that we shall subsequently discuss. Authorised officers will be required to document their grounds for inquiries. That documentation would, in turn, be subject to routine checking by managers.

Concerns have been expressed about the amount of reliable data that agencies may hold. It has been suggested that it could lead us, via the card issuer, to a concealed bank account and so on. We need the help of the agencies to defeat the 2 million or so annual loss to public funds. Credit reference agencies are a useful gateway to information about a claimant's financial circumstances in order to determine the amount of fraud.

As regards the question about leaving a "footprint", banks that go to a credit reference agency leave a footprint behind, so any other bank or organisation would know that Barclays, Lloyds or whichever organisation has interrogated the credit reference agency. We have established with the agencies that their system will not divulge our inquiries to any subsequent inquirer. We shall place an example of a typical credit reference agency in the Library, so that the noble Lord may satisfy himself on the details. Equifax and Experian are the two major ones. I have had a quick look at some of the information provided by one of those. It makes it clear that the credit agencies themselves do not determine credit standing. It is the organisations that do that, on the basis of the information provided by the credit reference agency.

In regard to Amendment No. 6, perhaps I may confirm that we are talking about CIFAS. No other bodies are known at present. However, for procedural reasons it could not be named on the face of the Bill; otherwise, a question of hybridity would arise. That is why the reference in the Bill is worded in this way.

I hope that I have addressed the two main concerns of the noble Lord: whether this provision will affect someone's credit standing and whether, in asking for the information, the department will leave a footprint. The answer is no on both counts. As a result, I hope the noble Lord will feel able to withdraw his amendment.

Lord Higgins: As always, the noble Baroness is very helpful. We look forward to reading the example--no doubt anonymous--which will be placed in the Library to enable us to see what information is received from the credit agencies. Clearly, this is an important point.

It would seem that the Government have done a specific deal with the agencies--the Minister nods and the noble Lord, Lord Grabiner, who is expert in these matters, shakes his head--to the effect that the department's footprints will be "erased from the snow". So the problem that I raised at Second Reading does not arise. The Minister nods to indicate that that is the case.

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In exchange for part of this information the department will no doubt make a payment to these organisations. We shall come to the question of payment in relation to subsequent amendments. As I understand it, the Government are making the credit rating agencies and those concerned with fraud a special case: they are to be paid, whereas the Government are treating other organisations which will equally incur costs in the same way as they are treated in other pieces of legislation. It unusual to pay a particular organisation for its services in this way and not to pay others which incur equal cost.

Baroness Hollis of Heigham: I addressed this matter earlier. The point is that banks and insurance companies hold this information anyway for their own use, and we are seeking access to it, whereas the credit reference agencies' reason for existing is the provision of such information. Therefore, such payment does not seem unreasonable. Had we not been willing to pay them, I am sure the noble Lord would have been equally forthright in his criticism.

Lord Higgins: Either you pay them all, or you do not pay them all.

Baroness Hollis of Heigham: They are not the same. Surely the noble Lord can make a distinction between an insurance company or bank and a credit reference agency.

Lord Higgins: Yes, I do not dispute that there is a distinction. I merely wonder whether this approach is justified. Credit rating agencies have all the information readily to hand, in the same way as a bank does.

Baroness Hollis of Heigham: But they provide that information--unlike banks, which hold it as ancillary to other priority purposes.

Lord Higgins: I understand that very well. We look forward to seeing what the noble Baroness's example reveals, and on the point that was raised earlier. Subject to that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

6.15 p.m.

Lord Higgins moved Amendment No. 7:

    Clause 1, page 2, leave out lines 1 to 3.

The noble Lord said: In line with other amendments, this seeks to probe the position with particular regard to,

    "any person carrying on a business the whole or a significant part of which consists in the provision to members of the public of a service for transferring money from place to place".

I am not quite clear what kind of organisation the Government have in mind. Since subsequent clauses make provision for international exchanges of information, is the provision particularly concerned

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with organisations of that kind? I simply do not recognise the description. Perhaps the noble Baroness can help us.

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