Call to dump Open Banking automatic data sharing plan

By Melissa Coade

Sunday May 30, 2021

(Image: Adobe/SasinParaksa)

In a submission to the Australian Treasury led by the Financial Rights Legal Centre, advocates have called for the government to scratch a proposal that will automatically sign Australians up to data sharing under the Consumer Data Right and Open Banking regimes.

Under a new proposal from Treasury, joint account holders will be automatically signed up to having their personal financial data shared with Open Banking if the other person they share the joint account with chooses to engage with the new system. 

The Financial Rights Legal Centre, which promotes changes to regulation, policy and industry practices that will help create a fairer marketplace for consumers of financial services, argues the government should not be able to automatically collect joint account holders data in this way. 

Centre CEO Karen Cox said the plan was fundamentally flawed and undermined consumers’ right to affirmative consent. 

“Australians want a safe and secure data environment that puts their privacy ahead of the increasingly rapacious desires of industry,” Cox said 

“Treasury’s proposal undermines the privacy rights of citizens and subverts the Open Banking regime’s own requirements to provide Australians with the ability to voluntarily and expressly consent to the sharing of their data with other parties.”

According to the centre, the proposed new rules also contravene the ACCC’s consumer data right (CDR) basic privacy principles, with added risks for people facing financial, elder or domestic abuse. They say proceeding with Open Banking’s automatic data sharing plan would therefore undermine the CDR before it even has the chance to get underway.

“Consumers – be they joint account holder or not – should be free to decide how much or how little of their information they wish to share in exchange for the use of Open Banking services,” Cox said. 

“[The plan] runs counter to the ACCC’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,” she added.

The Consumer Action Law Centre and the Australian Communications Consumer Action Network also contributed to the joint submission calling for Treasury to shift to an opt-in model.

The advocacy groups have also called for all CDR participants to establish processes to flag those consumers who may victims of abuse (via self-identification and practice identification for signs of abuse); and a requirement under the CX design standards to ensure that there are clear communication channels for those consumers who are abuse victims to self-identify and seek help.


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