What is the Consumer Data Right?
The Office of the Australian Information Commissioner (OAIC) will be introducing the Consumer Data Right (CDR) from July 2020. Consumer data rights are the rights of consumers to direct their supplier to share their information with others. The CDR aims to give individuals and companies the ability to efficiently and conveniently access their data and have more control over how it is shared with third parties. The privacy controls will be enforced by the OAIC and the Australian Competition and Consumer Commission (ACCC), economy-wide, across all sectors, starting with banking. And, the scope is significant with the law covering any CDR data generated or collected both in Australia and internationally where the data holder is registered under the Corporations Act or is an Australian citizen.
With the enforcement of CDR, consumers will have more control over their data, privacy protections will be in place, and increased competition between service providers will drive innovation across the Australian economy.
What consumers stand to gain
The principal benefit of the CDR is to give consumers greater control over their data. The term consumers covers a broad range of people, from individuals to businesses and trusts. Ultimately, it applies to anyone who is reasonably identifiable from CDR data. Under the CDR scheme, consumers can direct their data to be shared with providers of their choice through a secure online system. Consumers will have confidence that their data is being transferred and managed securely as accredited providers will be accessed through a system with strong in-built privacy protection rules. Data can only be shared within the system with consumer consent, meaning that individuals and small to large-sized companies alike can stop the collection of their data at any point.
With data held centrally, consumers are able to monitor their finances, utilities and other services and investigate, compare and switch between suppliers more easily. The idea is that, with more visibility, consumers will be able to access the products and services that better suit their needs. And, with consumers having the ability to compare more openly, the government hopes that businesses will become more competitive, creating innovative offerings to entice customers.
What This Means for Businesses
Businesses need to be aware that once their sector is designated under CDR law, product and consumer data must be disclosed on a customer’s request. That is more than just names, contact details and transaction history; product data includes supplier information, availability and product terms and conditions. To gain accreditation under the scheme, businesses must meet stringent requirements relating to data collection, usage and storage, data privacy and customer consent. The ACCC’s existing enforcement powers will stretch to cover the new regime. If an accredited provider breaches its obligations, they can have their accreditation suspended or cancelled or can face significant fines.
This is not something that can be solved by implementing a document, a policy, or even a framework. Businesses need to invest time in developing processes around managing consumer data, which also includes how they collect it, process it, delete it, as well as how they handle consumer requests around it. From there, businesses need to invest in educating their staff across these procedures.
The CDR is being introduced initially to the banking sector. The big four have had to share product data from July 2019 and consumer data from February 2020. Other authorised deposit-taking institutions (ADIs) will be phased in from July 2020. After this, the regime will be rolled out across the energy and telecommunications sectors. While the dates are yet to be finalised, the rules will be applied in a similar context to the banking sector.
What Should You Do Now?
If your business is in the banking, energy and telecommunication sector, now that the law has been passed, you need to prepare for the new rules. When it comes to your business you’ll need to:
- Consider if the new data laws apply to your business.
- Plan how you will comply and review what needs to change.
- Review whether you hold valuable data sets.
- Think about how your business can leverage CDR data.
- Update and implement new compliance systems and processes.
- Build procedures for dealing with customer requests.
- Train employees to be aware of CDR laws.
- Record and report on your compliance.
Ultimately, to participate in the CDR scheme, you need to be an accredited provider. To find out how you can become accredited and take advantage of the business benefits, contact us today.
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