Information & Ethics Committee on May 27th, 2014

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

But if they pull a report, does that not impact the score that you give?

[Carol Gray]

Not necessarily.

[John Russo]

Not necessarily. There are soft inquiries, as you mentioned, or hard inquiries. If it's for credit adjudication, that would impact your score. If an inquiry is just for account management or some other purpose, that would be a soft inquiry.

[Tara Zecevic]

John, just to add to that, like inquiries are also lumped together. So for instance, if I'm looking to purchase a home and I'm applying for a mortgage, and within a period of time, if I'm going to multiple lending institutions to apply and get the best rate for that mortgage, that's put together as one inquiry. Also, inquiries are only one of the variables that are used in the calculation within the score.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Yes, but doesn't the number of people who are accessing, either soft or hard inquiries, whatever you want to call it....That then gives more people access to the information that you have collected, right? Which then opens the door for more potential identity theft.

So if I call Rogers to get a cellphone and they say they have to check my bureau, that gives another person on a telephone an opportunity to access my information, just to get a cellphone, when I might already have three or four other accounts with Rogers for my TV and have great credit.

In summary, who stands up for the consumers? I don't think it's you guys because you work for business, and that's fine. But who stands up for us when you make a mistake? Why should it be so difficult for us to fix a mistake that you make, or businesses make, which you are just bringing forward on their behalf?

[Chantal Banfield]

I'd like to just address one of your questions with regard to the dissemination of information because of the fact that multiple credit reports may be requested.

You mentioned telcos. Typically, this is the way that telcos will handle that. The agent on the phone actually doesn't see the credit file. The credit file goes in a repository of information that is secured. It's in a bunker. You need to swipe and fingerprint in order to get in there, and the agents on the phone only get yes or no.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Yes, but somebody—

[Chantal Banfield]

They get a decision. So the access to information is very tightly controlled. I don't want you to get the impression that anybody can just see a credit file.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

I guess my impression would be that if I already have three other accounts with Rogers and they're all really good, why would they have to pull even a soft inquiry? I mean, why would you allow them to do it?

[The Chair, NDP, Pat Martin]

As interesting as this is, I'll have to interrupt. You're well over time there, Paul. I think you set a new record for being over time, actually.

That concludes our first round of questioning. I'm going to take a liberty and ask one question from the chair. It's not along quite the same lines, although it does strike me that when a business calls for a credit check, you don't mail the response to them. You don't ask them to wait 48 hours for it to arrive in the mail.

Two of you mentioned that you support in a qualified way the duty of notification that's contemplated in the legislation pending. Under what circumstances would you think a consumer would not have the right to know that their identity had been compromised? Why is your support for the duty to notify qualified in any way?

Can either of you answer, just briefly?

[Carol Gray]

The response is not qualified by a reluctance to have the information accessible in a timely fashion by the consumer. It's part of an evolving business model. It's a matter of making the investment in order to change the channels of access.

[The Chair, NDP, Pat Martin]

Okay. Maybe this will come up in other questioning.

Mr. Ravignat, you have a five-minute round.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you, Mr. Chair.

Although it may be surprising, I share many of the same concerns that my colleague across the way brought up. I also share his cynicism. There's just something bizarre about having to wrestle basic information about yourself that's held in companies who seem to want to render that somewhat inaccessible or difficult to get to. I know that there have been improvements.

At any rate, that won't be my line of questioning. I'd rather talk about the aboriginal situation.

I have two first nations in my riding. I'll be very quick, but maybe I'll illustrate my point with a story I was told by an Algonquin friend on Kitigan Zibi. He decided to buy a boat for his mother, because his mother went out every season to go fishing in a particular place that was quite far. He made a pretty good salary, and one day he came back and bought a boat. He presented it to his mother by surprise. She just kind of looked at him, clueless, so he said to her that this way she could get to her fishing hole quicker. She said, “Well, why would I want to be fast?”

I think the story illustrates that there is a certain headspace that we're all in around this committee, including yourselves, and we're dealing with a fundamentally different way of viewing the world. To integrate these individuals into a system that they may not, in fact, want to participate in.... I don't think we can simply say it's an issue of education. I think it's an issue of choice as well. I think there are individuals who very well know what this system represents and what it means. Communities and individuals are consciously deciding not to participate in it.

One of the reasons would be, well, what will be done with that data? Some of you are in the business of selling that data. Selling data on first nations people is a historical problem, because their data, whether it be cultural, linguistic, artistic, or otherwise, has basically been stolen and made into consumer goods in order to make profit for non-aboriginal companies.

I understand, though, the assumption on the basis that this is good, that this is something that needs to be done. That's why I applaud Mr. Rowe's references to the importance of deep consultation and deep conversations with aboriginal people about this and how that tool can actually be used by the communities by themselves, if they desire to, in order to develop their communities or what have you.

Having said that, Mr. Rowe, it's clear that you've done consultations. I'd like to know what themes come up, what concerns come up, from aboriginal communities about integrating themselves in the entire credit system.

[Murray Rowe]

That's a great question.

We were at a conference in Toronto recently with several chiefs, Chief Roxane, from Temagami, for example. We had an in-depth conversation. When we were chatting with them, they were initially very hesitant about working with us. It was funny, because when you talk about cultural differences, I was told not to show up in a suit, not to wear a tie. But I thought that was interesting, because my culture is to wear a suit and tie. I don't necessarily need them to change their culture, but I'm not changing my culture. If I always wear a tie, I'm not going to be false to who I am. I think that kind of honesty and those kinds of conversations and behaviours are needed.

We started off with and had very direct and sincere conversations with them. One of the conversations that came up was about Pic River, for example, where they have a huge demand for housing on the reservation. One lady ended up getting a personal loan for 24%. All the banks that were at the conference were pursuing the first nation communities, and they were saying, “We really want your business”. One of the chaps, Moses, who was the housing manager, went up and said, “What is this all about? How can you expect someone to pay a 24% interest rate?”

But, to be fair, the challenge to many of these institutions is that things like ministerial loan guarantees require incredible labour and reviews and bureaucracy in order to secure and in order to allow banks to feel comfortable with moving ahead. The interesting thing is that the number one comment I get is, “I want to be able to build wealth and help my children and grandchildren, and to pass that on”.

Diane Francis recently wrote a new book. It was about kind of a partnership between Canada and the U.S. I'm not so keen on that concept necessarily. But one of the things she talked about was how, in 1776, Congress, by removing lands from the crown and pushing it into allowing home ownership, really kicked off the greatest wealth-creation engine in the history of the world.

It's fascinating. People can look back. We're talking about something hundreds of years old: personal ownership of land. We see wealth in the United States certainly in non-native communities. I think, quite frankly, a lot of natives are sitting back and saying, “Why can't I own my land? Why can't I have financial independence? Why are we prevented from doing this?” But I think it's flipping now to understanding that, quite frankly, banks are global, and they're looking to process loans efficiently and to have reasonable risk.

I think if we can build the files, we can reduce fraud, which is part of the mandate of this committee, but in addition, we can unleash billions of dollars in mortgages for the financial institutions. But let's have it be competitive. Let's have it be at non-native financing rates. I think what's motivating the aboriginal communities is the thought of passing on to their grandchildren and their children property wealth, of having financial independence, and quite frankly, of having autonomy instead of getting a handout.

There's $14.1 billion flowing onto reserve. That's great, but I think a lot of reserves are moving towards financial independence and are looking at changing the paradigm.

[The Chair, NDP, Pat Martin]

I'm afraid you're out of time, Mr. Ravignat.

Mr. Rowe, thank you.

Next, for the Conservative's five-minute round, is Mr. Zimmer.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Thank you for appearing before committee today. I have just a couple of questions.

I think a lot of us, as regular Canadians, have this perception of a hacker being a 17-year-old kid who's pretty good with computers, and that's the person who's stealing our identity and just having some fun with it.

Who are these new fraudsters? Put a face on who organized crime is. Is it organized crime in Canada? Is it the Hells Angels? Can you put a face on it for us, if you wouldn't mind answering as well as you can?

[John Russo]

In terms of hacktivism, there are different organizations. There are nation-states attacking other states. There's organized crime. You have gangs of individuals who prey upon consumers and their personal information to create these identities or steal their information. There are one-offs; people happen to find a person's wallet or identification and create these one-off crimes. There's not one group per se, in terms of the hacking or in terms of who's going out and seeking this information. There's a multitude.

[Tara Zecevic]

I might just add that what we're also seeing with organized crime is that different crime groups who would compete in certain areas are actually collaborating. There could be some groups who are actually good at obtaining the identities. There are other groups of organized crime who are good at creating the plastics, and then there's another group who may actually go to the ATMs and pull out the cash, if that's the particular scheme they're after. There have been numerous cases where we're seeing that kind of collaboration, and they're treating it as a business. If only they put their means to legitimate ends, they could do some great things, but they don't. We're seeing this organizational collaboration globally.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Would it be gangs who are doing it? Would it be the Taliban? Who are we talking about? I'm assuming we have two groups, domestic and foreign, right? You said nation-states.

What is the predominant one that you see attacking and wanting our identity, let's say, the majority?

[John Russo]

The majority here in Canada are Canadian organized criminal activities emanating from Canada.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Okay.

Would it be organized crime like gangs in Vancouver, and one stealing the cards or information?

Yes, okay. I just want to know what is predominant.

You talked also about terrorist organizations being involved in this. Can you list some examples of which terrorist organizations have been doing it in terms of using stolen identity to finance their regimes?

[John Russo]

I couldn't provide that information to you in terms of which terrorist organizations. When we work with law enforcement, and our security departments work in terms of—

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

You just know that it's happening.

[John Russo]

We know that it's happening.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Okay.

We heard from former presenters about when our children are born and issued a SIN number. Mr. Russo, I think it was you who said that those are the ones that are hijacked. We heard earlier too that, because they go unchecked for many years, by the time you realize what happened, it's too late.

Can you take us through the chronological picture of what happens? When it's stolen, what kind of things would it be used for? What would that number be used for in terms of it being put on.... I'm not trying to give the criminals a leg up on how to do this, and I don't want you to. Should we look at our kids' credit report at 10, then 15, and then 20? Is it something we should be on—