Quebec Credit Assessment Agents Act and the Consumer Credit Lock



Updated: November 2022


Background


As a result of the Credit Assessment Agents Act (the "Act"), starting February 1, 2023, consumers in Quebec will have the right to place, suspend, or revoke a credit lock on their Equifax consumer credit report. When a credit lock is active on an Equifax credit report, the report and derivative or related products will not be delivered to lenders and other businesses, in an effort to help prevent new or additional credit obligations from being established in the consumer's name.

Starting February 1, 2023, when a consumer has placed a lock on their Equifax credit report and the request for information is related to new or additional credit obligations, Equifax will return a new designator code with a value of "7" ("Credit Lock") on the response along with the message "Report Unavailable - Consumer Has Locked Their Credit File".

To ensure our customers and partners are ready to consume the lock code "7" on their member reports, test cases for client testing in our UAT environment are available on the Equifax Developer Portal. The production environment will be available in advance of the credit lock "go-live" date of February 1, 2023. Note: testing is not required by clients who access reports via the Equifax Member Portal online.
 


Impact


Under the Act, when a consumer places a lock on their credit file, Equifax is prohibited from delivering the credit file or any products derived from the credit file (e.g. scores, attributes etc.) to the requestor who plans on using the data, for example, for the following uses:
  • Entering into a credit contract;
  • Increasing credit;
  • Extending credit;
  • Entering into a long-term contract for a lease of good (e.g. a car loan); or
  • Entering into a contract involving sequential performance for a service provided at a distance (e.g. a payment plan for a cell phone or a product whereby a service is provided upfront and the payment is made at a later date)

Frequently Asked Questions

What does this mean for Equifax customers?

As a result of the Act if the request is submitting a request for one of the non-exempt use cases outlined above and the consumer has placed a lock on their credit file, Equifax will return a new designator code with a value of "7" (Credit Lock) on the response back to the lender.

A no-hit designator code or an error message may still be delivered when Equifax is not able to locate the consumer's Equifax credit file based upon the input data provided by the requester. As well, where the use case is not one of the non-exempt use cases identified above, a successful response with the credit file and derived products (e.g. scores, attributes, etc.) will be provided in the normal course.
 
Customer Request Flow

What will the lock message look like?

The new lock designator code "7" will be included in the header section of the response returned by Equifax. Additional details can be found in Attachment 1 of the System-to-System manual provided to you by our support team.

Hit/No-Hit Designator
0 = No Credit File Requested
1 = Hit
2 = No Hit
3 = Manual File
4 = Consumer Declaration
5 = Referred File
6 = Contact Bureau Collection Department (discontinued)
7 = Credit Lock
8 = Reserved (internal use)
9 = Reserved (custom value)

What steps are required of Equifax customers in response to this change?

In order to successfully complete a transaction with Equifax, lenders must:
  • Adapt their applications to handle the new no-hit designator code - value "7"
  • Adapt their internal business processes in consultation with their legal teams to determine the actions to be taken when they receive the lock message
  • As per the bill, Equifax strongly recommends that customers do not waterfall to any other credit reporting agency.

Who can place a lock on a consumer credit file?

Credit locks can only be placed, suspended, or removed from consumer credit files by consumers themselves. Lenders or other third parties will not be able to place, suspend, or remove a lock on a consumer's credit file.

Are there any rules or requirements for consumers to qualify to place a lock on their file?

To place a lock on their Equifax credit file, consumers must pass verification, and be a resident of Quebec with a current residential address in Quebec on their Equifax credit file.

How will consumers be able to place locks on their Equifax credit file?

Consumers will be able to lock, suspend or revoke credit locks through Equifax digital channels such as the web, as well as via our call centre agents and walk-up centres. The updates to their Equifax credit files (lock, suspend, revoke) will be applied in real time or near-real time, depending on the method used by the consumer to make the request. For instance, if made via the web, we expect the update to be effective within a few hours.

Will credit lock capabilities be offered to all consumers living in any province of Canada on February 1, 2023?

No, Equifax will only provide credit lock capability to consumers who reside in Quebec, as per the regulation. Once there is a lock in effect on a consumer's file, Equifax will return a lock designator code 7 to any lender that is pulling the consumer’s file for adjudication purposes if they apply for credit.

Will there be a charge to consumers to lock or unlock their credit file?

No, Equifax will not charge consumers to lock, suspend the lock, or unlock their credit file.

If a consumer places a lock on their file while living in Quebec and subsequently moves outside of the province, what happens to the lock?

Currently, the right to place, suspend or remove a lock on an Equifax credit file only applies in Quebec. A credit lock placed on an Equifax credit file by a resident of Quebec will remain in place until the consumer removes it, even if the consumer subsequently moves outside of the province of Quebec. During this time, the consumer may suspend the lock, however once the lock is revoked, the consumer will not be able to place a new lock on the file unless they are residing in Quebec and have an active address in that province.

What happens if a non-Quebec resident tries to restrict access to their file?

Currently, the credit lock function is only available to residents of Quebec. The lock functionality will not be available to non-residents of Quebec. If a consumer is a resident of Quebec with their primary address in Quebec, but their Equifax credit file does not reflect this information, they must call National Consumer Relations and update their address.

What if a consumer has addresses inside and outside of Quebec?

If the current address on file is in Quebec, the consumer will have the ability to place the lock on their Equifax credit file. Once they have the lock in place, it will remain in place regardless of their current address until such time as the consumer removes the lock from their file.

How quickly can Equifax suspend or remove a credit lock at the consumer's request?

Credit access actions (lock, suspend, revoke) taken by the consumer via one of the available channels (web, call centre, walk-up centre) will be applied in real time or near-real time, depending on the method used by the consumer to make the request. This could be anywhere from a few minutes to a few hours. Requests made by regular mail may take 5-10 business to complete, depending on postal delivery times.

What's the difference between suspending and removing a credit lock?

If a consumer has placed a lock on their Equifax credit file, they will have the option to temporarily suspend the lock for a short period of time (e.g. 48 hours), after which the lock will reactivate. This suspension is to allow the consumer to temporarily grant access to their file if they know they are going to be seeking new credit (such as securing auto financing over the weekend while buying a new car). If a consumer decides they no longer want to restrict access to their file, they can contact Equifax to have the lock removed.

How will you exempt Member Numbers?

In the absence of instructions, most member numbers will be non-exempt. If you have member numbers that should be exempt, you will need to provide us with a list of member numbers and the use cases for that member number.

Some industry codes will be automatically exempt such as Collections or Insurance. The industry code is the two letter part of the member number. Here are the most common exempt industry codes:
  • Collections: AX to OX; QX to WX; YX to ZX (PX and XX industry codes are excluded)
  • Insurance: IG, IL, IQ, IX, IZ
  • Mortgage Insurers: FI
As part of Equifax’s technological transformation, you received a list of all of your member numbers and the products associated with each member number. Please use this list as our customer support team will not be able to respond to all requests to generate a master list. Please note that Equifax is not able to identify exempt vs non-exempt member numbers.

Will I need a new Member Number?

If you only have one member number or use the same member number for multiple purposes (e.g. bank accounts and credit or batch and credit) you will generally need to request a new member number. Our client support teams can work with you to evaluate your needs.

Can I flag an exempt request?

Yes. If you do not wish to create separate member numbers for exempt uses, you can send Equifax a flag in your request. The process will be outlined in the July update of our guidelines document.

What steps will be taken to grant lender access to a locked file during the loan process?

At a later date, Equifax may offer a solution that will enable consumers to grant lenders or third parties the ability to suspend or unlock the consumer’s credit file on the consumer’s behalf during the loan origination or credit application process.

Additionally, we may send alerts to the consumer so they can unlock their file if Equifax was not able to deliver it to the requestor because there is a lock in force. We do not yet have a timeline for the development or release of the above solutions.

What actions should be taken to have the consumer unlock their file if a lock message has been returned to a lender during a credit adjudication process?

The lender should contact the consumer to inform them that their credit adjudication process is being blocked by the presence of a lock on their file. Although Equifax is able to send an email or SMStext message stating the same to the consumer, they may opt-out of receiving such notifications.

When can the customer reprocess the transaction?

It is recommended that the lender wait for confirmation from the consumer that they have suspended or revoked their lock before re-submitting the transaction to Equifax. As mentioned earlier, the removal or suspension of the lock is controlled and initiated by the consumer. When Equifax receives the request from the consumer, Equifax will update the consumer’s credit file in as real-time as possible. For instance, if the request is made via the web, we expect the update to be effective within a few hours.

Under what conditions will the lock message be bypassed and regular processing occur?

The lock message will be bypassed for any use case that is not one of the prohibited use cases set out in the Act and outlined above. The following are examples of exceptions from the lock, under which conditions the Act will not apply:
  • Government agencies pulling a consumer's credit file for the purpose of background checks, screening, investigation, as well as determining eligibility for social services
  • Lender requests for opening a bank account or for portfolio management
Though the Equifax credit file is locked, Equifax will continue to process the request and provide the scores and products that the customer subscribes to. A full list of current exceptions is available upon request.

How will Equifax determine whether a request for a credit file falls under exempt or non-exempt use cases for the Act?

Equifax will use the customer's member number that is submitted on their input request.

When a file is exempt from the Act, can we still get an indication that the file is locked?

Yes, in addition to all products and scores being returned, by default for online transactions a message will be returned on the consumer’s credit report indicating that the file is locked and that the consumer credit file data should not be used for credit adjudication purposes. The locked file indicator “7” will be returned in the header section of the response in the hit-no-hit designator field instead of the hit value “1”. In addition, a further warning message will be displayed on the consumer declaration section of the report similar to other consumer alerts (e.g. Bill 152). For batch transactions, by default, we will not return the lock indicator on exempt transactions. Below is a snippet of the default settings for both online and offline. Any deviation from the default requires customization.

Channel EXEMPT
Default Settings
NON-EXEMPT
Default Settings
Online Lock Flag 7 (Header) +
Consumer Declaration Lock Warning +
ACRO Report +
Scores + Products
Lock Flag 7 (Header)
Batch ACRO Report +
Scores + Products
Lock Flag 7 (Header)

When will this new hit designator code "7" be available for user acceptance testing for both STS and Web channels?

The user acceptance environment was made available in September 2022.

Is the Deposit Alert product impacted by the Act?

Yes, when there is a lock in effect on a consumer’s Equifax credit file and the request for the bureau file is for the purposes of credit adjudication, Equifax will not return a credit file or any products derived from the credit file (e.g. scores, attributes etc.) including Deposit Alert, on the response back.

Will there be any impact to our data submission/reporting?

The Act has no impact on data reporting. Each institution will continue reporting their trade data on all customers/consumers. The data will continue to be updated regardless of the presence of a credit lock on the file.

Is there any impact to the credit score when a file is locked?

The credit lock will not impact the consumer’s score since it is not an element of data that is used in the score attribute calculations. At the same time, even though a consumer’s credit file has been locked for x number of years, the score will continue to be calculated since, as per the above item, a consumer’s file will continue to be updated despite the presence of a lock.

Will inquiries posted during the time the file was locked still be visible?

Non-derogatory or soft inquiries will still be placed on the file, however attempted inquiries (i.e. an attempt to pull a locked credit file) will not be displayed on either the consumer- or customer-facing report.

What about the Exemption for AML/KYC Identity uses of credit profiles? Is this allowed?

AML Assist for the purpose of identity verification is exempt and the requests will be returned.
AML Assist as part of a credit file is non-exempt and when a credit file is requested for loan adjudication, no components of the file will be returned.

Will Credit Agencies share consumer information or restrictions?

No. A consumer must apply a credit lock with each credit reporting agency. If the consumer wishes to suspend or remove a lock, they must do so at each credit reporting agency independently. Equifax and TransUnion are not permitted to share consumer information, however Equifax will provide consumer education about other credit reporting agencies and provide contact information, to assist customers in contacting the other bureau.


Use Cases and Exemptions


Updated: September 2022


Non-Exempt Use Case:
  • Equifax will return hit/no hit designator code "7" credit lock message on the response back to the customer
  • No credit file information in whole or in part, including no derived products such as scores, Deposit Alert, SafeScan, SafeScan ID, Decision Power) are returned
Exempt Use Case:
  • Equifax will return the credit file as well as all products and services as per usual subscriptions
  • By default, For ALL exempt ONLINE use cases where the CAAA does not apply and there is an active lock in force on the consumer's file, Equifax will automatically return the locked file indicator "7" in the header section along with the following message in the Consumer Declaration section of the report:

    ****WARNING**** THE CONSUMER HAS LOCKED THEIR CREDIT FILE AND THE DATA CANNOT BE USED FOR CREDIT ADJUDICATION UNTIL THE CONSUMER REMOVES OR SUSPENDS THE LOCK

Use Case by Customer Type

Use Case by Customer Type For the purpose of: Batch/Online Exempt: Yes/No
(Yes = Equifax will return the file and all products)
Employers or Employment Agencies Background check, screening Batch/Online Yes
  
Government Background check, screening Batch/Online Yes
Government Investigation Batch/Online Yes
Government Commercial loan with a principal bureau pull: any principal's file that is frozen will not be returned, nor should be used in the business loan's credit adjudication flow Batch/Online No
Government Eligibility for social services Providing or Extending social benefits Batch/Online Yes
Government Granting a loan (VS industry code) Batch/Online No
Government Debt recovery / collections Batch/Online Yes
Government Student Loans Batch/Online No
Government Student loan repayment maintenance after the loan enters the repayment stage and/or otherwise enabling payment/recovery of the debt Batch/Online Yes
  
Collection Agencies Debt recovery (industry codes ending with X) Online Yes
Collection Agencies Member reporting/reconciliation - Deliver a complete file with the collection items or the trade data associated to the customer's portfolio Batch Yes
  
Collection Agency / Lender, Financial Institution or Other Consumer's debt is restructured or settled, reducing or to reduce the outstanding amount owing and/or otherwise enabling payment/recovery of the debt with or without a debt settlement agreement Batch/Online Yes
  
Lender, Financial Institution or Other Fraud Monitoring - We will return trigger alerts, scores and SafeScan products such as "confirmed true name fraud" Batch Yes
Lender, Financial Institution or Other Marketing - Access credit files to pre-screen prospects (non- government). No credit file returned. We return flags such as scorable, hit, no-hit, thin file Batch Yes
Lender, Financial Institution or Other Portfolio Management - Access credit file to review performance and make risk decisions. As long as the risk decision does not include extending, increasing or entering into a new contract for credit or a long-term lease of goods or a contract for sequential services performed at a distance, the credit lock will not prohibit the receipt of the credit file or related products. Batch Yes
Lender, Financial Institution or Other Portfolio Management - Access credit files to review performance in order to upsell or cross-sell (i.e. extend, increase or enter into a new contract for credit or a long-term lease of goods or a contract for sequential services performed at a distance, the credit lock will prohibit the receipt of the credit file or related products. Batch No
Lender, Financial Institution or Other Skip Tracing - For Contact ID program. Return address data (non-collection agencies) Batch Yes
Lender, Financial Institution or Other POC/Model Build/Score Revalidation - Request for data Batch Yes
Lender, Financial Institution or Other Portfolio Management, Account Management Batch Yes
Lender, Financial Institution or Other Bank Account Opening without upsell/cross-sell to products such as overdraft, credit cards, or other loan products as part of the process Batch/Online Yes
Lender, Financial Institution or Other Bank Account Opening with upsell/cross-sell to products such as overdraft, credit cards, or other loan products as part of the process Batch/Online No
Lender, Financial Institution or Other Credit Adjudication: Entering into a credit contract Batch/Online No
Lender, Financial Institution or Other Credit Adjudication: Increasing credit Batch/Online No
Lender, Financial Institution or Other Credit Adjudication: Extending credit Batch/Online No
Lender, Financial Institution or Other Entering into a long-term contract for a lease of good (e.g. car lease) Batch/Online No
Lender, Financial Institution or Other Entering into a contract involving sequential performance for a service provided at a distance (e.g. a payment plan for a cell phone or a product whereby a service is provided upfront and the payment is made at a later date) Batch/Online No
Lender, Financial Institution or Other Up-sell/cross-sell another product to new and existing customers, including credit line increases Batch/Online No
Lender, Financial Institution or Other Adding overdraft protection to a new or existing bank account Batch/Online No
  
Mortgage Insurers Institutions that are insuring a loan (eg. mortgage) Batch/Online Yes
Insurance Credit bureau pulls by insurance members for the purpose of granting home/auto insurance (industry code IG, IL, IZ) Batch/Online Yes
  
Landlord Rental tenancy application Online Yes

Use Case by Platform or Product Type

Use Case by Platform/Product For the purpose of: Batch/Online Exempt: Yes/No
(Yes = Equifax will return the file and all products)
Aggregated Scores and Products such as Neighborhood View Data Insights Batch Yes
AML Standalone Fraud Check Online Yes
BuyNowPayLater (BNPL) Lease of a good or extension of credit Batch/Online No
Credit File For loan adjudication Batch/Online No
D2C / B2B2C Direct to Consumer Reports Online Yes
eID Authentication Online Yes
Ignite Direct Analytics using aggregated data Batch Yes
Ignite Marketplace Insights using aggregated data Batch Yes
Lead Generation Generating qualifications/quotes on consumers (requestor is not extending credit) Batch/Online Yes
Other (Tenant Selector) Rental Inquiries (Lease of a good) Batch/Online No
PPSA Validation of file against Consumer PII and PPSA Online Yes
Pre-Qualification (one-step process) Pre-Qual process that has one step:
  1. The request for pre-qualification is the same request to be subsequently used when the consumer applies for the loan to make the loan decision.
The purpose of the pre-qual transaction is to extend credit
Batch/Online No
Pre-Qualification (two-step process) Pre-Qual process that has two distinct steps:
  1. First step is to make a request for information to provide a quote or possible loan amount/terms (affordability).

  2. Second step is to make another request for information once the consumer has decided to apply for the quote/possible loan to make the lending decision.
In step one, no credit decision is made, the purpose is to enable the consumer to understand affordability, thus, the lock does not apply.

In step two, a credit decision will be made and therefore the credit lock does apply, the lock message will be delivered if applicable.
Batch/Online Yes for step 1 only
No for step 2

Additional Resources


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Equifax Canada Migration Support Team
1-800-387-9986 (option 3) BT.sts@equifax.com