Damages (Credit Reporting)

Nammo v. TransUnion of Canada Inc., 2010 FC 1284 (CanLII)

[34] PIPEDA recognizes the reality that organizations collect, use, and disclose personal information. The acceptable purposes for collection, use and disclosure are those described in s. 3 of PIPEDA, namely those that “a reasonable person would consider appropriate in the circumstances.” These are not necessarily the standards set by or for an industry. In this respect, I agree with the following statement of the PCC in its Report:

TransUnion has taken the position that it acted at all times in accordance with the Alberta Fair Trading Act and section 3.3(2) of the Credit and Personal Reports Regulation of the Act. It takes the position that [PIPEDA] has no application in these circumstances. I disagree. [PIPEDA] sets out independent obligations that must be respected by all organizations covered by the Act. The fact that TransUnion may have respected its obligations under the Fair Trading Act does not mean that it can ignore the obligations under [PIPEDA].

Lastly, I note that nowhere in the Accuracy Principle or in Schedule I is there any reference to industry standards. If all industries had standards that equalled the scheme in PIPEDA, then the Act would have been unnecessary. To now tie the two together would be to neuter the Act and its impact.

[40] Credit information, such as that supplied by TransUnion, has one use: to allow credit grantors to make informed, reliable and objective decisions. Informed, reliable and objective decisions require that the information on which the decisions are based meets a high standard of accuracy, completeness and currency. This role of credit information and credit agencies such as TransUnion was described by Justice Feldman of the Ontario Court of Appeal in Haskett v Equifax Canada Inc. et al., 2003 CanLII 32896 (ON CA), (2003) O.J. No. 771, para 29, as follows:

Credit is an integral part of everyday life in today's society. Not only people seeking loans, mortgages, insurance or car leases, but those who wish, for example, to rent an apartment or even obtain employment may be the subject of a credit report, and its contents could well affect whether they are able to obtain the loan, the job or the accommodation. Credit cards are a basic form of payment but their availability is also limited by one's creditworthiness. Without credit, one is unable to conduct any financial transactions over the telephone or on the internet. As credit is so ubiquitous, there is nothing exceptional about consumer reliance on credit reporters to carry out their function not only honestly, but accurately, with skill and diligence and in accordance with statutory obligations. [emphasis added]

[43] I find that the applicant’s personal information in the possession of TransUnion was not “as accurate, complete, and up-to-date as is necessary for the purposes for which it is to be used” (clause 4.6) and was not “sufficiently accurate, complete, and up-to-date to minimize the possibility that inappropriate information may be used to make a decision about the individual” (clause 4.6.1). I agree with the findings of the PCC that TransUnion failed to meet its obligations under clauses 4.6 and 4.6.1 and thus breached PIPEDA.

[66] Section 16 of PIPEDA provides that “[t]he Court may, in addition to any other remedies it may give … award damages to the complainant, including damages for any humiliation that the complainant has suffered.” This provides the Court with exceptionally broad power to award damages. Nevertheless, any damages awarded must be awarded on a principled basis, and be appropriate and just in the circumstances.

[68] I am satisfied that in the circumstances experienced by Mr. Nammo it would be the exceptional person who would not be humiliated. He had partnered with a friend to undertake a business; his role was to secure financing because he was creditworthy while his friend was not, and the loan was approved subject to the credit check, which came back indicating that Mr. Nammo had poor credit. Mr. Nammo then had to inform his partner of this result. Although he said to his partner that the information was wrong, the credit reporting service said that it would take up to 30 days to investigate, during which time the opportunity and partnership were lost. In addition, RBC officials were provided with information that led them to conclude that the applicant was not a good credit risk. The reasonable person, knowing that the assessment made of his creditworthiness must be incorrect, would be humiliated at having to face and to protest to both his prospective partner and to bank officials. The reasonable person would suffer additional humiliation when the error was not clearly corrected by informing RBC and the credit applicant that an error was made, that there was no debt owed by the applicant, and that the error had been corrected.