Financial Rights has serious concerns that sweeping changes to the Consumer Data Right will allow highly sensitive consumer data to be accessed by unauthorised third parties.
Financial Rights Director of Casework Alexandra Kelly said the new rules could enable companies which are not required to meet the regime’s higher security and safety standards for privacy, to access private and sensitive consumer data.
These concerns have been outlined in a submission to the Australian Competition and Consumer Commission as part of consultation concerning proposed changes to the Consumer Data Right Rules.
“The entire point of the Consumer Data Right is to build a secure data environment in which consumers feel confident and safe using and sharing their data,” Ms Kelly said.
“This proposal will fundamentally undermine consumer trust and confidence in the CDR.
“It is also likely to open the floodgates to non-accredited companies to obtain sensitive data without having to meet higher privacy standards. In some cases they won’t have to meet any privacy standards at all.”
According to Office of the Information Commissioner’s 2020 Community Attitudes to Privacy survey, 83 percent of Australians want the government to do more to protect the privacy of their data.
“There is scant evidence of any consumer demand for Open Banking services but there is real evidence of high levels of consumer demand for increased privacy protections,” Ms Kelly said.
“It is disappointing that the ACCC’s proposal places the finance sector’s interest in obtaining consumer data ahead of the consumer interest in a stronger privacy regime.”
The ACCC also proposes to introduce new rules that allow more direct marketing to take place, and the sale of consumer data.
Other proposals include a raft of complexities to the regime including multiple tiers of accreditation, self-regulation with minimal oversight and a new set of confusing and contradictory consents that undermine the voluntary and informed nature of consent in the digital age.
“These proposals could result in financially vulnerable people being targeted by new Open Banking players and sold expensive credit and inappropriate debt and credit solutions they can’t afford,” Ms Kelly said.
“We urge the ACCC to reconsider these erroneous recommendations and instead put consumer interests at the heart of the new data regime.”
Financial Rights submission to the ACCC CDR Rules consultation paper can be found here.
Open Banking is the ability for consumers to access and control their financial data and share it with other banks or third party financial services who may provide a range of services using the data – from account and credit card switching to budgeting and tax advice.
The Consumer Data Right (CDR) is the broader right the government is introducing to enable people to access their data and provide it to an accredited business (an accredited CDR provider). The banking sector – via Open Banking – is the first sector to provide this access. It is expected to roll out to other sectors include telecommunication, energy, superannuation, insurance and others.