Financial Rights Legal Centre is calling on the Australian Government to halt the introduction of new rules that will increase privacy and security risks for people when sharing their financial data.
This is a Financial Rights Legal Centre media release, originally published on 30th July, 2021.
The government should rescind proposals to:
- allow the transfer of raw financial data and “insights” outside of the safeguards and protections of the Consumer Data Right regime, and
- automatically opting Australians joint account holders into data sharing under the Consumer Data Right and Open Banking regimes.
These are the key recommendations of a joint consumer submission to the Australian Treasury led by Financial Rights. Financial Rights Chief Executive Officer Karen Cox said the government’s proposals on so-called “trusted advisers”, CDR insights and joint accounts fundamentally undermine the safety and security of the regime as originally promised.
“Australians want a safe and secure data sharing environment that puts their privacy ahead of the rapacious data desires of industry,” Ms Cox said.
“But Treasury’s latest proposals undermine the privacy rights of citizens by allowing sensitive financial data to leave the protections of the Open Banking regime and be handled by entities with either lower or non-existent rules to safeguard and secure this data. This defeats the entire point of developing a safe and secure system for people to share their data with confidence.”
The Treasury “trusted adviser” proposal means that CDR financial data will for the first time be able to be shared with third parties such as mortgage brokers, accountants and other professions – many of whom do not have to meet basic Privacy Act rules, or data handling or security standards.
“Why has the government spent almost 6 years developing a new data right for consumers, spending millions on creating a safer, more secure data sharing system – only to undermine it completely by allowing that data to be shared with unaccredited third parties with no effective consumer protections in place?”
Treasury’s previously announced proposals regarding automatically opted in joint account holders to sharing their personal financial data if one account holder chooses to engage with Open Banking continue to raise serious concerns.
“Disappointingly, Treasury are persisting with the proposal despite the fact it contradicts basic privacy principles already set out in the Consumer Data Right,” Ms Cox said.
“It runs counter to the Australian Competition and Consumer Commission’s recommendations to strengthen consent requirements and puts the business interests of the FinTech sector ahead of the need to protect consumers’ privacy and security.
“It also poses additional risks to vulnerable people facing financial abuse.”
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