Cellular phone customer objects to supplying personal information for credit check
PIPEDA Case Summary #2002-104
[Principle 4.3.3, Schedule 1; section 5(3)]
An individual alleged that a telecommunications company, as a condition of supply of service, demanded his consent to the collection of personal information beyond what was required to fulfil explicitly specified and legitimate purposes.
Specifically, the complainant considered it inappropriate and unnecessary for the company to have asked for either a credit card number or his Social Insurance Number (SIN) in order to run a credit check before activating cellular phone service.
Summary of Investigation
The complainant purchased a cellular phone and a special holiday plan, which entitled him to a set amount of air time minutes per month for one year, with the first six months free. His intention was to participate in the plan only for the first six months.
When the complainant spoke with a company representative to activate the phone and confirm the details of the plan, he was informed that, as it was possible for purchasers of the plan to exceed their prepaid air time, a credit check was required. To facilitate the credit check, he was asked to provide either a credit card number or his SIN. The complainant objected, as he did not want to enter into a credit relationship with the company.
When customers call the company to activate their phone, it is company policy to request either a credit card number or a SIN to facilitate a credit check. A company representative explains the reason for the credit check during the activation call.
Upon being informed that service could be terminated if the allotted monthly air time was exceeded by a certain number of minutes, the complainant offered to prepay an additional monthly amount over the first six months to cover the potential excess. The company's response was that the only way to obtain the six months free air time was to sign a one-year service contract, for which a credit check was required. The company also offered to refund his money in view of the possible miscommunication that may have occurred when he purchased the phone service.
The company offers an alternative payment plan that enables cellular phone purchasers to prepay for set amounts of air time - without undergoing a credit check. The complainant did not pursue this option as he would not be eligible for any free air time.
Issued December 19, 2002
Jurisdiction: As of January 1, 2001, the Personal Information Protection and Electronic Documents Act applies to any federal work, undertaking, or business. The Commissioner has jurisdiction in this case because a telecommunications company is a federal work, undertaking, or business as defined by the Act.
Application: Principle 4.3.3 states that an organization shall not, as a condition of the supply of a product or service, require an individual to consent to the collection, use or disclosure of information beyond that required to fulfil the explicitly specified, and legitimate purposes. Section 5(3) states that an organization may collect, use, or disclose personal information only for purposes that a reasonable person would consider are appropriate in the circumstances.
The Commissioner determined that the personal information requested of the complainant was required for the purpose of facilitating a credit check and was only used for that purpose. He was satisfied that the company did explicitly state the purpose for the collection of the complainant's personal information, when the complainant initially contacted the company and in his subsequent dealings with the company.
The Commissioner was also satisfied that, as the company does offer an alternative payment plan for customers who do not wish to provide personal information for the purpose of a credit check, obtaining products or services from the company was not contingent upon a credit check. He found, therefore, that the company had met its obligations under Principle 4.3.3.
The Commissioner also determined that, as the air time plan could have resulted in users being billed for additional charges beyond their prepaid air time, a reasonable person would consider it appropriate for the company to collect personal information for the purpose of extending credit. He found, therefore, that the company was in compliance with section 5(3).
The Commissioner concluded that the complaint was not well-founded.
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