Question from a reader:
Is it legal for credit reporting agencies to store other people’s personal information and disclose it to other companies? Also, is it possible for financial institutions that have not done so in the past to revise their personal information protection policies and disclose borrowing amounts, etc.?
About Credit Reporting Agencies and the Handling of Personal Information
The question
regarding whether credit reporting agencies can store other people’s personal information and disclose it to other companies is a very important and sensitive topic. In our daily lives, we often provide personal information to financial institutions and other services. It is natural to be concerned about how that information is handled and whether there are any legal issues involved.
What is a Credit Reporting Agency?
First, let me briefly explain what a credit reporting agency is. A credit reporting agency collects and stores consumer credit information and provides it to financial institutions and other businesses. In Japan, well-known examples include “CIC Co., Ltd.” and “National Consumer Credit Information Center of Japan.” These agencies collect various types of information, such as repayment status of loans, history of defaults, and credit card usage. This information is a crucial factor for financial institutions when making lending decisions. In other words, credit reporting agencies play an important role in managing our “credit.”
Legality of Disclosing Other People’s Personal Information
Now, returning to the question of whether it is illegal for credit reporting agencies to store other people’s personal information and disclose it to other companies. This is a very important point, and from a legal perspective, it is generally not considered a problem if certain conditions are met. For example, Japan has the “Personal Information Protection Act,” which establishes guidelines for the handling and provision of personal information. Under this law, credit reporting agencies are permitted to manage personal information appropriately and provide it within necessary limits. In other words, the provision of information is conducted within a legal framework. However, it is important to note that the information must be obtained properly, and the provided information should not be in a form that can identify individuals. If the information was obtained illegally or if there is no consent from the individual at the time of provision, this clearly constitutes illegal activity.
Considering Specific Cases
For instance, let’s say a friend requests information from a credit reporting agency to undergo a mortgage loan examination. In this case, the credit reporting agency can provide the financial institution with the friend’s past borrowing status and repayment history. This is necessary information for assessing his credit and is legally permissible. However, if the friend’s information were to be shared with others without his consent, this would be against the law. In fact, there have been past cases of credit information leaks and misuse, so it is essential to handle personal information with utmost care.
Changes in Personal Information Protection Policies
Next, regarding whether it is possible for financial institutions that have not previously done so to revise their personal information protection policies and disclose borrowing amounts, this is theoretically possible, but in practice, various factors come into play. Revisions to personal information protection policies are influenced by a variety of elements, including the strategies of financial institutions, changes in the market, and amendments to laws. For example, if a financial institution aims to provide more transparent services to its customers, it may consider disclosing borrowing amounts. However, since personal information would be disclosed to others, even in such cases, sufficient consideration from legal and ethical perspectives is required. Specifically, measures should be taken to ensure that individuals cannot be identified when information is made public, and obtaining the individual’s consent becomes crucial.
Considering Actual Risks and Impacts
Here, I would like to express my opinion. There are certainly both advantages and disadvantages to financial institutions disclosing borrowing amounts. Increased transparency may allow customers to make better choices. However, it could also lead to privacy violations and dissatisfaction due to comparisons with others. From my perspective as a psychology major, the psychological impact on individuals cannot be ignored. For example, knowing others’ borrowing situations might lead to feelings of anxiety or inferiority, such as, “Why does that person have more debt when I have less?” It is important to consider these psychological aspects as well.
Conclusion
The storage of other people’s personal information by credit reporting agencies and its disclosure to other companies can be legal if certain conditions are met. However, careful attention is needed for the proper handling and protection of personal information. Additionally, while it is theoretically possible for financial institutions to revise their personal information protection policies to disclose borrowing amounts, many considerations must be taken into account in practice. It is important for each of us to understand how our credit information is handled and to assert our rights when necessary. In an era where all kinds of information are easily accessible online, it is essential to have a solid understanding to protect our personal information.
