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Trade References and the Confidential Nature of Credit Information
Businesses are subject to a variety of laws relating to the confidentiality of certain types of information. For example, if a contract with a customer contains a non-disclosure agreement, there are specific prohibitions relating to disclosure of information about that customer.
In addition to contractual restrictions, there are ethical standards associated with credit investigation with which credit professionals should comply. The concept of the confidential and privileged nature of credit information and the exchange or such information has been vital in the development of positive working relationships among trade creditors.
Ii may be more accurate to say that customer credit and payment information is held in "trust," rather than held in confidence. Customers expect that credit departments will only release factual credit information to other trade creditors with a need for this information.
Edited by Michael C. Dennis. Mr. Dennis is a business consultant specializing in improving the effectiveness and efficiency of the quote to cash process.