The Federal Court has dismissed a case against the credit reporting agency Veda Advantage claiming defamation and negligence arising from alleged failure to maintain accurate credit files.In a judgement handed down last week the court dismissed proceedings brought by all nine applicants in the action (the case was not a class action but the applicants' claims were similar enough for their cases to be heard together).The nine applicants alleged that they were refused credit by lenders who relied on incorrect credit reports in Veda's database. The applicants said this was defamatory. They also alleged that Veda was negligent in not meeting its duty of care obligations to ensure the information in its database was correct.The court dismissed the claim of defamation, saying that in a number of cases the credit files were transmitted from one computer to another and used in an automated credit scoring process. In such cases, where no one actually read the documents, no defamation could occur.In other cases, where credit officers read the files, some of the applicants might have been defamed. But the court ruled that Veda was protected by qualified privilege. The ruling said that a business (the lenders that were Veda members) should be able to make inquiries about the financial standing of the people it was dealing with and "the answers, if given honestly and bona fide, should not subject the giver to an action for defamation."The court went further and stated what could be read as an endorsement of credit reporting. "Individuals seeking credit are anonymous and the vast majority of credit providers are, generally speaking, not known to each other."The only means by which they can satisfy their legitimate interest in obtaining information as to the creditworthiness of seekers of credit is by a computer database of the very kind that Veda maintains."The negligence claim was that Veda supplied inaccurate data to its subscribers and, as a result, the applicants suffered loss by being refused credit or lost the opportunity of obtaining credit on more favourable terms. Veda was obliged under the Privacy Act to check the accuracy of the data but, it was alleged, did not do so.Veda subscribers enter customer information in the Veda database. This forms the content of the credit reports and is available to all subscribers. The system operates electronically.The court found that the credit reporting agency's responsibility was not to check each file (it has 14.5 million consumer reports on its database) but to give credit providers supplying it with information detailed instructions on the types of personal information permitted The court also found that there was no general duty of care owed to consumers by Veda. "If Veda owed the applicants any duty of care at all it was a duty directed to ensuring that its database accurately reflected and passed on to inquiring credit providers the very particulars of default which the listing credit providers wished to enter into the database."The court said the applicants' case was not helped by the fact