CAT / FIA FFM Syllabus F. Credit Management - Data protection - Notes ^{4 / 5}

The UK's Data Protection Act makes certain restrictions about the use of data about individual customers and the use of personal data.

Credit reference agencies are exempt from the Data Protection Act, but are covered by the Consumer Credit Act 1974.

The growth of information technology and the concern for civil freedoms and individual privacy has meant that legislation has been passed restricting the use of computer-held data.

In the UK the current legislation is the Data Protection Act 1998.

This Act is an attempt to protect the individual.

The terms of the Act cover data about individuals - not data about corporate bodies.

Therefore for a business offering credit to customers this is of concern for accounts receivable who are sole traders as opposed to companies.

It is likely that the business will hold data about such individual sole trader credit customers therefore a knowledge of the provisions of the Act are required.

The coverage of the Act

Key points of the Act can be summarised as follows:

• With certain exceptions, all data users and all computer bureaux have had to register under the Act with the Data Protection Registrar.

• Individuals (data subjects) have certain legal rights.

• Data holders must adhere to the data protection principles.

The rights of data subjects

1. A data subject may seek compensation through the courts for damage and any associated distress caused by the loss, destruction or unauthorised disclosure of data about himself or herself or by inaccurate data about himself or herself.

2. A data subject may apply to the courts for inaccurate data to be put right.

3. A data subject can ask to see his or her personal data that the data user is holding.

4. A data subject can sue a data user (or bureau) for any damage or distress caused to him by personal data about him which is incorrect or misleading as to matter of fact.