In July 2006, New Zealand Post will be introducing a certification program requiring businesses to lodge a Statement of Accuracy (SOA) certificate with their bulk mail. This certificate will report the percentage of postal addresses in a business’ mailing database that have been validated against the New Zealand Post Postal Address File. The transition period will cease in July 2008, and all businesses applying for VolumePost discounts will be required to attach the SOA certificate with their bulk mail lodgements. This certification can only be obtained using New Zealand Post certified software. As a Data Services Alliance Partner of New Zealand Post, Baycorp Advantage (now Veda Advantage) has developed GeoCoder, a software program designed for address matching, cleansing and validation of address data in accordance with the standards set by New Zealand Post.

The current release of GeoCoder already appends the new postcodes and applies the currently required New Zealand Post address standards. Using GeoCoder, an organisation can access bulk mail discounts of up to 25% and benefit from increased address accuracy that in turn facilitates cost effective and appropriate communication with customers and allows streamlining of customer information to a single household view. As shown in the graph below, a company that uses GeoCoder can make significant annual savings with New Zealand Post’s bulk mail discounts. This example shows that a company that sends out 750,000 mail pieces in a year can save almost $25,000 by using GeoCoder to cleanse and validate addresses according to New Zealand Post standards for VolumePost discounts.

In addition, GeoCoder can enhance customer and prospect data by appending data variables enabling an organisation to profile and segment their customers and prospects. The data variables available through GeoCoder include: Meshblock – a geographic boundary which contains on average between 35 – 40 households and is used by Statistics New Zealand to report on the Census LandSscape – a geodemographic segmentation tool which provides insights into the lifestyle and behaviours of people based on the area in which they live GeoRisk – a risk profiling tool that categorises areas based on their level of credit risk.

To find out more about GeoCoder or to request a free trial please contact Baycorp Advantage (now Veda Advantage).

The Veda KYC product suite of flexible tools will help you electronically verify the identities of your customers. Veda has developed these products with a pilot group of leading financial institutions. Leveraging Veda’s unique data and advanced matching algorithms, the KYC suite is uniquely positioned in the Australian identity verification market.

VeriCheck AML (Verification of individuals)

VeriCheck AML assists reporting entities to satisfy their KYC requirements by verifying personal identity information of a customer against various data sets. Personal identity information includes name, residential address and date of birth.

Combined with other data sets, VeriCheck AML verifies against unique data which contains more than 20 million insurance claims of Australian individuals and companies*.

VeriCheck AML Credit (verification of individuals -‑ exclusively for consumer credit portfolios)

VeriCheck AML Credit assists reporting entities to satisfy their KYC requirements by verifying personal identity information of a customer against various data sets. Personal identity information includes name, residential address and date of birth.

In conjunction with other data sets, VeriCheck AML Credit verifies against Veda’s credit bureau, which contains the details of over 14.5 million credit-active individuals in Australia.

VeriCheck AML Commercial (verification of organisations)

VeriCheck AML Commercial verifies the organisational identity information of commercial entities such as companies, trusts and associations against various data sets. As well as public data sources, it verifies against Veda’s commercial credit bureau, which contains the credit details of more than 3.5 million companies and businesses throughout Australia.

VeriCheck AML Commercial is the foundation of Veda’s organisational verification offering. For additional customer due diligence, Veda also provides a comprehensive suite of commercial solutions.

For more information on how Veda Advantage can turn your KYC obligations to your business advantage, please contact 13 31 24 or email sales.aus@vedaadvantage.com

*subject to appropriate consent

• Enabling Australia’s financial sector to maintain international business relationships
• Preventing and detecting money laundering and terrorism financing by meeting the needs of law enforcement agencies for targeted information about possible criminal activities and
• Bringing Australia into line with international standards to counter money laundering and terrorist financing as set by the Financial Action Task Force (FATF).www.austrac.gov.au

The AML/CTF legislation imposes a number of obligations on “reporting entities” when they provide “designated services”. A key requirement for reporting entities is to assess their money laundering and terrorism financing risks, and establish a risk based AML/CTF programme that complies with their obligations and addresses those risks.

A major element of any AML/CTF programme is to verify the identity of customers. These obligations are known as Know Your Customer (KYC) requirements and are effective as at 12 December 2007.

To specifically address your organisation’s compliance responsibilities, please seek legal advice.

Credit scoring summarises credit-related information available at the time of application and weighs data attributes to produce a numerical estimate of risk. This numerical score is used to rank potential customers and to determine whether their application for credit should be accepted or declined according to your policies.

Veda Advantage, Australasia’s largest provider of credit-related information, is recognised globally as an expert in the use of statistical modelling to optimise credit management and reduce fraud risk.

Launching to the Australian market in November 2007, the new generation VedaScore is a fully segmented credit risk management solution incorporating today’s powerful risk predictors.

The VedaScore Consumer suite of products enhances decision making power in both the financial and telecommunication sectors. It is built using sophisticated statistical techniques on a superior dataset. For the first time, a new Veda Consumer plus Commercial scoring product for both the financial and telecommunications sectors gives you a complete applicant profile for even smarter credit decisions.

The VedaScore product suite includes:

• VedaScore Financial Consumer
• VedaScore Financial Consumer plus Commercial
• VedaScore Telco Consumer
• VedaScore Telco Consumer plus Commercial

VedaScore Consumer provides an improved scoring solution to Veda customers. The new Veda Consumer scorecards are far more segmented and utilise more powerful risk predictors than the previous generation of risk management tools. The data samples have been updated and are more extensive, and have been comprehensively tested to ensure data accuracy and integrity.

In these new data samples, the total consumer population has been split into five distinct segments. These segments have been rolled up into a single calibrated score. This ensures that any particular score denotes a specific level of risk, regardless of the scorecard segment an applicant is drawn from.

The single calibrated VedaScore enables easier and more efficient implementation, innovative risk management solutions, and automation of credit lending process efficiency.

The enhanced predictive power of VedaScore gives you:

• Increased profitability
• Better informed decisions
• Improved portfolio management
• More accurate loss predictions (Basel II)

The result is reduced risk and more efficient and accurate processing of credit applications, leading to cost savings and quicker, more informed decision making.

Whether your customers are consumers or commercial entities, Veda has the expertise, unique data sources and analytical resources to help you achieve your business goals.

To find out more about VedaScore, please contact 13 31 24 or email sales.aus@vedaadvantage.com

Veda Advantage has a number of credit management tools available to help organisations make informed business decisions. Debbie Leo, Regional Sales Manager, Commercial Australia & New Zealand, is an expert in developing solutions for organisations of all sizes to effectively make these decisions. She suggests five tips to better assess and manage customer risk.

1. Implement credit policies for your organisation

   Document your credit policies and ensure your credit and trading terms are legally compliant. The Australian and New Zealand Privacy Acts stipulate that written consent must be obtained prior to accessing personal data on those people behind an organisation. It is essential you have this clause signed by your customers.

2. Confirm details

   Confirm the Australian Registered Body Number (ARBN) and/or the Australian Company Number (ACN) with the registry websites to confirm the organisation’s legitimacy and structure. It is also important to identify if a trust is involved. A good indicator of this is ensuring the ACN is embedded in the Australian Business Number (ABN). Other important details include the directors’ name/s, adverse history, and history with other credit providers and wind-up petitions that can be identified through ASIC.

3. Check your customer’s credit history

   Veda Advantage’s eAlert can alert you to changes in your customer’s credit file and circumstances to allow you to prepare accordingly, reducing potential exposure to risk. Veda Advantage (Australia) Ltd also offers a Risk Alert Monitor on new applicants for warnings of corporate change such as directors, new charges, default information and court actions.

4. Verify your customer’s stated assets

   Once a customer signs a director’s guarantee, it is important to ensure the guarantee is worth the paper it is written on. Being able to identify whether a director actually owns the property is essential.

5. Use a default to your benefit

   The ability to place a default on a credit file can be a powerful incentive for your customer to pay an outstanding debt and escalate their willingness to pay their account. An organisation’s credit history is shared between various domains and its industry participants, so it is in the organisation’s interest to avoid having defaults listed.

One year later, Data Express (www.dataexpress.vedaadvantage.com) is already being used by the debt collection departments of 6 of the 10 largest consumer credit providers in the country, dozens of smaller credit providers, and some of the most prominent debt collection companies and mercantile agents in the industry.

What do these organisations have in common? They all share an appreciation for the importance of data quality in their collections processes. Quite simply, even the most shrewdly designed collections processes and highly trained collections staff will be ineffective if debtors cannot be contacted. Up-to-date debtor addresses and phone numbers are the lifeblood of an effective collections function.

And that’s where Data Express is different. While it also draws upon the standard publicly available reference sources used by competing data cleansing services, only Data Express sources debtor contact details from the Veda Advantage credit bureau database.

The impact of accessing this vast proprietary database is reflected in the numbers. In a series of trials involving debtors that they had been unable to contact, a handful of large credit providers took advantage of a free data quality assessment feature that is available through Data Express.

This feature allows registered users to upload a file of debtor records to the Data Express web portal, cleanse them, and receive a free report that summarises the results achieved. These companies found that Data Express returned new addresses for up to 50% of records input. They also found that Data Express appended phone numbers to up to 25% of records.

While the bottom line impact of using new data varies according to the amounts outstanding and the nature of the collections activities, some typical scenarios can deliver an ROI of over 300%. Not a bad way to lift the performance of a collections department!

If you’d like to take advantage of this free data quality assessment feature, all you have to do is go to www.dataexpress.vedaadvantage.com and complete the free online registration – a Veda Advantage staffer will then get in touch and show you how to use this powerful resource. If you’re pleased with the assessment results and choose to purchase the output data itself, you’ll find it reassuring that you only get charged on a success basis. There’s absolutely no processing fee – if Data Express doesn’t add value, you don’t pay.

For more information on Data Express call (02) 9236 9999 or visit www.dataexpress.vedaadvantage.com

ASIC stipulates that a company meeting two of the following three criteria are required to lodge financials:

• Greater than $12.5 million in assets (from $5 million in assets)
• Greater than $25 million in revenue (from $10 million in revenue)
• Greater than 50 employees component is unchanged.

This means there are now fewer Australian companies required to submit financials and that the majority of companies are deemed to be small. They are therefore not required to lodge financials.

However, credit managers will have the comfort of knowing that ABR’s Strategic Account Analysis Report (SAAR) has a success rate in obtaining full financials of approximately 90%. This investigative report gives credit managers an expert independent third party assessment based on financials ensuring that they make a balanced and well informed commercial decision.

For more information, please contact ABR on 1300 366 402 or email abrdata@abr.com.au

ABR is recognised for its innovation in high end financial reporting which will enhance Veda’s already rapidly growing commercial information services business. Our aim is to form a ‘one stop shop’ for customers and this acquisition is the perfect opportunity to ensure we identify and fill gaps in products and services.

ABR, under the Veda banner, will continue to produce high quality investigative reports. In fact, the reports will be further enhanced by the data held by Veda Advantage and the additional options this data will be able to provide to clients. ABR’s reports will continue to provide detailed financial information and analysis required by companies to measure the risk of their suppliers, prospective partners and take over interests.

Veda Advantage is committed to continuing to grow the depth and breadth of the business information services we can provide to our customers.

Veda Advantage believes a more comprehensive assessment of a person’s credit history when making lending decisions would protect consumers from taking on more credit than they responsibly should – helping to keep our credit markets stable and secure.

It is generally assumed that banks and lenders in Australia and New Zealand have access to a person’s full credit history, however this is not the case. Under the current ‘negative’ reporting system in both countries, banks and lenders only have access to past customer applications for credit, and whether a default has occurred in the past five years. This means they don’t have as much information as they should when assessing a credit applicant’s true ability to repay a loan, which leaves our credit markets open to a similar situation as the sub-prime lending markets in the US.

Australia and New Zealand are two of only a handful of countries in the world that still have a negative only credit reporting system.

While the Australian Law Reform Commission’s amendments to the Privacy Legislation are a good step in the right direction, by not adopting a comprehensive reporting system consumers and businesses are left vulnerable not only to incomplete and inferior credit assessment practices but also to a growing array of identity crimes.

It is unclear how quickly New Zealand authorities would be prepared to examine comprehensive reporting in New Zealand. Veda Advantage recognises that a comprehensive reporting system is not a panacea and would only work if it adhered to strict governance standards relating to consumer data and privacy regulations. Consumers’ credit details would stay safe and secure. In conjunction with a comprehensive reporting system, Veda recommends strengthening obligations on credit reporting agencies to ensure data quality, data security and effective compliance with privacy requirements. It is our recommendation that information kept on credit reports would only be accessible to strictly authorised institutions, and would not be used for direct marketing in any circumstances. In addition, we would like to see more powers to the credit reporting regulator, to oversee and make sure lending standards are kept at an optimum level.

The ALRC released a report on credit reporting law which will be considered by the Australian Government in March 2008. In New Zealand, although the NZ Law Commission has a privacy review underway, there is still no commitment from either the government or the Privacy Commissioner to consider comprehensive credit reporting.

Veda Advantage said that consumers and credit markets are showing signs of stress with a rise in reported defaults in 2007 of 28.6% over 2006. On a state-by-state basis, Tasmania led the country with a 59% default increase, followed by the Northern Territory with a 49% default increase. Western Australia had a 44% increase, Queensland rose by 41%, New South Wales saw a rise in defaults by 40%, followed by a rise in the ACT and South Australia by 35% and Victoria by 10%.

As conditions toughen, borrowers and lenders need the best information – including good payment history – to protect them. This is a once in a generation chance to get the legislation right. The proposed changes are a good platform for reform, but we need to go further. Consumers and lenders need the best information to make borrowing decisions. Consumer protection needs to be toughened, particularly for responsible lending and the proposed cause of action on privacy.

The three key tests for the legislation are:

• Does it provide the best information for borrowers and lenders?
• Does it strengthen consumer protection?
• Does it offer business the flexibility required to operate efficiently in the new digital and information economy?

On all three we have made a good start – but there’s a lot more work to do. On the first, lenders and now the ALRC accept that the right information can make a difference. What is the best information for Australia still needs to be determined in an empirical Australian Data Study, but it is almost certain to include account balance or payment history.

We have asked the government for regulatory relief to support an Australian Data Study to determine the best information for Australian borrowers and lenders, and the impact of any change on them. The Data Study would be complete before the ALRC reports in 2008. <small>(p1425 ALRC DP72 Part G)</small>

The ALRC had not gone far enough to strengthen consumer protection. The existing law provides consumer protection designed in the 1980s. It’s out-of-date and all parties agree it is ineffective. Unfortunately, ALRC proposals to translate existing law into regulations will not succeed in strengthening and modernizing consumer protections for a 21st century
credit market. <small>(p1375 ALRC DP72 Part G)</small>

Veda Advantage would like a complete re-think of consumer protection, dealing with consumer concerns about responsible lending and unfair practices.

Veda Advantage maintains that under a genuinely improved system, Australian banks and lending institutions would lower their lending risk, and would gain back time and money employed in chasing bad debts. Through the provision of more accurate and comprehensive information, Australia could also see a reduction in the incidence of identity fraud, money laundering and terrorism financing.