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Ignorance of privacy can be costly

Date: 22/05/2015

Taylor v Orcon Limited [2015] NZHRRT 15

The Human Rights Review Tribunal has bared its teeth in a number of decisions in 2015, highlighting that privacy breaches can lead to substantial compensatory awards.

In the latest decision, the Tribunal ordered Orcon to pay Brett Taylor $15,000 for hurt and humiliation after breaching his privacy after Orcon referred an incorrect debt of $208.52 to Baycorp.

Taylor ordered a modem and broadband package from Orcon in early 2012, and after issues with the connection, he cancelled and returned the equipment. Orcon said that it would waive any account charges. After unexpectedly receiving a bill, Taylor followed this up and was ridiculed by Orcon staff. Orcon instructed Baycorp to pursue the debt. After a significant period during which Taylor continued to dispute the debt, Baycorp, on Orcon's advice, registered the debt with credit report provider Veda Advantage.

By this time, Taylor had relocated to Linton Army Camp and was looking for a rental property for his young family. Because of the negative impact on his credit rating, Taylor and his partner were rejected almost 20 times when applying for a home through real estate agents, and were also denied credit with GE Money.

While Orcon argued that its policy was to investigate any complaint over charges before alerting Baycorp, the Tribunal found this did not occur, and Orcon could not credibly explain why. The Tribunal found that in referring the debt, Orcon provided Baycorp with inaccurate and misleading personal information in breach of the Privacy Act 1993.

The Tribunal awarded damages against Orcon of $10,000 for the loss of benefits flowing from his incorrect credit rating, as well as $15,000 for humiliation, loss of dignity and injury to feelings. Orcon was also ordered to undertake Privacy Training for staff with the Office of the Privacy Commissioner at its own cost.

The decision is a reminder to employers that compliance with the information privacy principles under the Privacy Act 1993 is critical. While Taylor was not an employee of Orcon, employers are bound by this same obligation that was breached by Orcon. This decision involved Principle 8, which requires that an agency shall not use personal information without first checking that it is accurate, complete, relevant, up to date, and not misleading.

This decision follows the trend towards comparatively large awards by the Tribunal that was started with the decision in Hammond v Credit Union Baywide [2015] NZHRRT 6. In that case, the Tribunal awarded substantial compensation of $98,000 to the successful claimant employee.

Our team are experts on privacy in the employment context. We will be holding a breakfast seminar in the next few months covering this topic in detail.

Let us know if we can assist you further.