Credit data regulations and role of credit information companies

Data is considered one of the most valuable sources for all market segments and even society in general.

It provides an unprecedented opportunity for marketing and understanding the needs of consumers across different markets.

Today we will discuss one of the most important types of this data, which is credit data.

The credit information law in Saudi Arabia defines this type of data as consumer data related to credit transactions such as loans, purchase requests, rents, credit cards and the extent of a commitment to repay these.

This data is circulated when the consumer performs the aforementioned commitments between the governmental or private entity that the consumer resorts to and the credit information companies that have a contract to exchange credit information with these entities.

Moreover, limiting this data exchange process contributes to ensuring the required confidentiality and the privacy of consumers as well.

But what is the role of these credit information companies?

These licensed companies simply collect and store credit information about consumers and provide government or private contracting agencies with that information, if requested, by preparing a consumer credit record that contains credit information about a consumer and their commitment to any related obligations.

To ensure confidentiality and security, the Saudi credit information law outlines several violations, the penalties of which amount to a fine of no more than SR1 million ($266,5000). It is doubled in the case of a repeat offense, and an offending company will have its temporary license suspended or canceled.

Violations include the following: Practicing the activity of credit information companies without obtaining a license from the Central Bank of Saudi Arabia.

Violating the terms of a license, which includes any member of a credit information company, or one of its affiliates, divulging confidential information, whether during work or after leaving work.

Using credit information or exploiting it for any illegal purpose; any delay by a governmental or private entity or the credit information company in updating credit information on specified dates; failure to correct any error immediately upon discovery or providing false or fraudulent data about a consumer.

Concerning disputes that arise between consumers and companies, a committee shall be formed based on a decision by the minister of finance to look into violations of provisions of the credit information law, impose penalties and settle disputes.

The committee also issues its decisions by majority, and its decisions may be appealed to the Board of Grievances within 60 days from the date of notification.