Unpaid phone bills pollute credit files

Thorn Group, a small consumer financier, yesterday offered a defence of its "no credit history checks" approach to marketing some of its rental products.

Writing in the annual report, published yesterday, chief executive John Hughes pointed out that 35 per cent of listing with credit reporting agencies are for telephone company accounts and for a class of credit provider - telcos - that are unregulated.

Hughes wrote that this was "a very poor situation, particularly given the enormous growth in mobile services to our younger generation who are suffering the impacts on their credit files".

He also complained that current credit files are only "negative" - that is, they only list defaults as well as credit applications. This may change under present reform proposals, however.

Thorn's applications process, Hughes wrote, "focuses on assessing and verifying the customer's financial capacity and ability to meet their repayment obligations".