Blacklists - Ten things you probably didn't know

1. Blacklists are not unlawful. No lender is compelled by law to give credit or to give any reason when declining credit. Each may consult several sources of information before making a decision, including any form of list that may exist. Any list containing personal data is automatically regulated by the Data Protection Act 1998.
2. Following the Race Relations Act 1976, many lenders and traders renamed their blacklists to ‘refer lists’.
3. Credit managers frequently meet in ‘credit circles’ to exchange information informally about slow payers and fraudulent attempts to obtain monies by deception. Credit circles are not regulated by law but the Office of Fair Trading has set out informal guidelines as to how meetings should be managed.
4. Following widespread failure to obtain successful prosecution of mortgage fraudsters via the Police and the Serious Crimes Office, mortgage lenders formed the Association of Mortgage Lenders in the early 1980’s to share information on fraudulent mortgage applications. Subsequently the Committee of Mortgage Lenders (CML), through its 109 full members and 87 associates who control 98% of all mortgages, shared information regarding repossessions on the CML Possessions Register, which was contained on credit files right up until June 2010, when it was abandoned and all historic details deleted.
5. Credit card operators first operated and shared a ‘hot card list’ of cards reported stolen or known to be in fraudulent use. The list originally had a limit of only 200 cards, but was quickly expanded to have unlimited depth, and today also includes cards that are over limit, amongst other things.
6. Our government publishes a Sanctions List of persons who cannot be commercially traded with and whose assets must be seized if identified by a bank or other company. There are currently over 6,000 names on the list. The UN, and Europe, both publish similar Sanctions Lists.
7. Individuals at over 100,000 private addresses in the UK are listed at CIFAS– the UK’s Fraud Prevention Service. A CIFAS warning will not lead automatically to a decline of credit, but members of CIFAS are required to liaise with each other and interrogate any application coming from that address much more thoroughly to rule out the possibility of fraud. All types of CIFAS warnings are reported to lenders on credit reports, but only two specific types - one of which is 'Protective Registration' placed on the database by individuals themselves - are contained on credit reports viewed by consumers.
8. Insurance companies share claim data on the CUE database – the Claims Underwriting Exchange – to protect themselves from claim abuse.
9. A £2 statutory credit file request, made by consumers under sections 7 and 9 of the Data Protection Act 1998, does not require a credit reference agency to provide details of fraud database entries that may exist against a consumer, other than 2 of the several types of CIFAS warnings, and all CML Repossession Register entries mentioned above.
10. Credit reference agencies do not maintain nor publish a general credit blacklist of persons who may not be provided credit. Their databases are based on factual events reported from many sources.

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