Volume 7, Edition 2, February 2011

This Month’s Challenge is sponsored by:

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Correct Answer: C. On December 30, 2010, the Brazilian Government enacted Provisional Measure no. 518/2010, which provides for the creation of databases on positive consumer information that contain data about timely payments and the due performance of obligations. The purpose of these databases is to provide companies and financial institutions with reasonable criteria to award diligent customers with smaller interest rates when granting credit. In order to be enrolled in the database, the consumer's consent is required. Once consumers have opted in, their payment information can be transferred by companies to the database, which then forms part of their specific credit history. Sensitive data and information that is not related to a consumer's credit history cannot be recorded. In addition, according to the Provisional Measure, the consumer is not only entitled to access, cancel and correct his or her data but also to be informed about the data controller's identity, the purposes of the processing and the recipients' identities, in case the data is shared or transferred to other databases. Consumers may opt out anytime from the database.

In Brazil, is it legal for companies to provide to public databases information about an individual's history in terms of their timeliness of payments and performance of obligations?

A. No, it violates Brazilian privacy law to provide such information.

B. Yes, but only about timeliness of payments, not about other performance of obligations.

C. Yes to both, but certain conditions must be met first.

D. Yes to both, period, no conditions.


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