Final answer:
A credit check according to PIPEDA can only be conducted with written consent from the individual. This requirement is similar to ethical standards in other consent-related contexts, such as research studies where informed consent is crucial.
Step-by-step explanation:
According to PIPEDA, a credit check can be conducted only with written consent from the individual. This reflects one of the core principles of personal information protection in Canada, which stipulates that organizations should collect only the minimum information requested, should clarify the purpose of data collection, and inform the individual how the information will be used and who will have access to it. Monitoring your credit history for red flags is essential to ensure that your identity has not been compromised.
In the context of financial markets, before a bank approves a loan, it conducts a credit check on the prospective borrower's past borrowing. This process necessitates obtaining proper consent from the individual whose credit history is being reviewed. Moreover, a full and transparent consent process ensures the ethical standards akin to the informed consent required in research studies, where participants must be fully aware of the study's scope and potential risks involved.