Federal Court Awards PIPEDA Damages

A self-represented Applicant won an award of $5,000 from the Federal Court today in Nammo v. Transunion of Canada Inc. for violations of the Personal Information Protection and Electronic Documents Act (PIPEDA), the first time that damages have ever been awarded under this statute.

The Privacy Commissioner of Canada (PCC) made a finding on January 22, 2010 that the Applicant’s complaint, made on April 8, 2008, was well founded, but resolved. The hearing request was then made under s. 14 of the Act,

Hearing by Court

14. (1) A complainant may, after receiving the Commissioner’s report, apply to the Court for a hearing in respect of any matter in respect of which the complaint was made, or that is referred to in the Commissioner’s report, and that is referred to in clause 4.1.3, 4.2, 4.3.3, 4.4, 4.6, 4.7 or 4.8 of Schedule 1, in clause 4.3, 4.5 or 4.9 of that Schedule as modified or clarified by Division 1, in subsection 5(3) or 8(6) or (7) or in section 10.


Mr. Nammo, the Applicant, had approached RBC bank in 2008 for a loan for a business opportunity, which was rejected because Transunion of Canada Inc., the Respondent, erroneously reported that he had bad credit.

Nammo was unable to get TransUnion to correct file, despite investigations which confirmed the mistake. TransUnion also refused to accept responsibility for the error, blaming information from a collections agency instead.

The PCC found that TransUnion had violated the accuracy principles under Schedule 1 of the Act,

4.6 Principle 6 — Accuracy

Personal information shall be as accurate, complete, and up-to-date as is necessary for the purposes for which it is to be used.


The extent to which personal information shall be accurate, complete, and up-to-date will depend upon the use of the information, taking into account the interests of the individual. Information shall be sufficiently accurate, complete, and up-to-date to minimize the possibility that inappropriate information may be used to make a decision about the individual.

But the PCC also found that the amending of the report and informing the bank of the mistake fulfilled the requirements to correct information under the Act,


When an individual successfully demonstrates the inaccuracy or incompleteness of personal information, the organization shall amend the information as required. Depending upon the nature of the information challenged, amendment involves the correction, deletion, or addition of information. Where appropriate, the amended information shall be transmitted to third parties having access to the information in question.

The Applicant sought a hearing under s. 14 for breaches of the above provisions. But the Applicant was also dissatisfied with TransUnion’s response to his complaints, and sought a hearing under Alberta’s Fair Trading Act, and the provisions under clause 4.10 of Schedule 1 as well,


Organizations shall put procedures in place to receive and respond to complaints or inquiries about their policies and practices relating to the handling of personal information. The complaint procedures should be easily accessible and simple to use.


An organization shall investigate all complaints. If a complaint is found to be justified, the organization shall take appropriate measures, including, if necessary, amending its policies and practices.

Jurisdiction Issues

Justice Zinn, writing for the court, found that the Federal Court did not have jurisdiction to hear breaches of 4.10, as they were not specifically enumerated in the s.14 hearing section, or matters not investigated or referred to in the PCC’s report.

They also did not have jurisdiction to hear complaints under the Fair Trading Act, a provincial statute.

The court refused to hear the Applicant’s submissions related to requests to provide documents under 4.9.4, as such requests must be made in writing under the Act,

Written request
8. (1) A request under clause 4.9 of Schedule 1 must be made in writing.

The court did claim jurisdiction related to 4.6, 4.6.1, and 4.9.5, and noted that the broad language used under s. 14 meant that such applications were not a judicial review of the PCC’s decision, but a de novo hearing altogether.


The court rejected TransUnions submissions that a finding of a breach should not occur where an organization has adequately responded to correct inaccurate information. The court also rejected the submission that an inadequate response be defined by industry standards or a failure to respond in a reasonable time.
The court did find that it was not reasonable to expect TransUnion to use an exact matching system, or automatically collect collect Social Insurance Numbers for greater precision, as they are primarily intended for administration of the Canada Pension Plan.
But the court also held there is no defence of practical necessity under PIPEDA, and an inexact matching system which makes commercial sense will not allow evasion of responsibility where the system leads to errors. The court held that TransUnion breached PIPEDA, and cited the Ontario Superior Court in Haskett v. Equifax Canada Inc.,

[29] Credit is an integral part of everyday life in today’s society. Not only people seeking loans, mortgages, insurance or car leases, but those who wish, for example, to rent an apartment or even obtain employment may be the subject of a credit report, and its contents could well affect whether they are able to obtain the loan, the job or the accommodation. Credit cards are a basic form of payment but their availability is also limited by one’s creditworthiness. Without credit, one is unable to conduct any financial transactions over the telephone or on the internet. As credit is so ubiquitous, there is nothing exceptional about consumer reliance on credit reporters to carry out their function not only honestly, but accurately, with skill and diligence and in accordance with statutory obligations.
[emphasis in original]

The court also found that TransUnion did not go far enough to correct their mistake with the bank, and they did not even provide the bank with an updated credit report once the mistake was discovered. The wording used by TransUnion even suggested that a fee might be charged for a corrected version of the new report, to which Justice Zinn stated,

[51] …Charging the recipient of false information sent by TransUnion for the corrected information would be outrageous in my view, and most certainly contrary to clause 4.9.5. The inference that the corrected information would only be provided on payment of a fee would likely result in the information not being requested because the transaction for which it was sought was at an end.


The court is provided wide latitude for remedies under the Act,

16. The Court may, in addition to any other remedies it may give,
An organization shall investigate all complaints. If a complaint is found to be justified, the organization shall take appropriate measures, including, if necessary, amending its policies and practices.

(a) order an organization to correct its practices in order to comply with sections 5 to 10;

(b) order an organization to publish a notice of any action taken or proposed to be taken to correct its practices, whether or not ordered to correct them under paragraph (a); and

(c) award damages to the complainant, including damages for any humiliation that the complainant has suffered.

The Respondent made several submissions against awarding damages, but the court found attempts to shift responsibility for the error to the Applicant “offensive.” The only submission of the Respondent that the court accepted in consideration of damages was that the Applicant had failed to prove any loss arising from the inability to secure the loan, and had failed to mitigate any loss he may have occurred. Consequently, damages for lost profit were not awarded.
The court cited Randall v. Nubodys Fitness Centres, where Justice Mosley stated,

[55] Pursuant to section 16 of the PIPEDA, an award of damages is not be made lightly. Such an award should only be made in the most egregious situations…

He noted that s. 16 allowed for damage awards even where no financial loss had occurred,

[68] …The reasonable person, knowing that the assessment made of his creditworthiness must be incorrect, would be humiliated at having to face and to protest to both his prospective partner and to bank officials. The reasonable person would suffer additional humiliation when the error was not clearly corrected by informing RBC and the credit applicant that an error was made, that there was no debt owed by the applicant, and that the error had been corrected.

[69] …Where the credit reporting service has failed to take prompt,
reasonable steps to correct the record and to therefore ameliorate the embarrassment of the individual, it should expect that it will be ordered to compensate him for the humiliation it has caused. A credit reporting agency makes a profit from trading in the personal information of others. Such business, perhaps more so than others, ought to be aware of the need for accuracy and prompt correction of inaccurate information. Such businesses should expect to be held to account when they fail to do so.

Justice Zinn then indicated that this was one of those egregious situations, as the Respondent had acted in bad faith, had profited from the disclosure, did not act in a timely manner, and “was a serious breach involving financial information of high personal and professional importance.”

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