CDR expansion to let accredited third parties make payments for customers

The federal government earlier this week expanded its consumer data right (CDR) to allow accredited third parties to initiate certain actions on behalf of customers, such as making payments, switching accounts, or setting up new energy connections.

Accredited third parties can use these "action initiation" powers once a customer provides access and consent to the actions being made, with the number of actions available to be limited to those that are relevant to the provision of a service.

Prior to the introduction of these action initiation, consumers could only use the CDR to instruct accredited CDR participants, such as banks, to share their data with an accredited third party.

Jane Hume, Minister for Superannuation, Financial Services and the Digital Economy, likened the new feature to a "digital concierge", which she said would help streamline everyday transactions and make it easier to understand the different products and services in the market or switch between providers.

The latest CDR update is in response to a report for Treasury conducted last year by lawyer Scott Farrell, titled Future directions for the CDR, Hume and Treasurer Josh Frydenberg jointly said.

"Action initiation is complementary to data sharing in enabling third party services to help consumers overcome barriers to decision making and participation by undertaking actions on their behalf," Treasury wrote [PDF] in a response to the report's recommendations.

In addition to action initiation only being applicable for actions related to the provision of a service, it cannot be used for actions deemed to be of significant risk to consumers' security or privacy, such as updating passwords. Beyond passwords, Treasury said it would continue to consult on other areas where there are risks associated with different types of actions.

The CDR expansion has come during a week when Gina Cass-Gottlieb was nominated to replace Rod Sims as the chairperson for the Australian Competition and Consumer Commission (ACCC). The watchdog's commissioner, meanwhile, was filled by Herbert Smith Freehills partner Liza Carver last month.

Cass-Gottlieb is set to replace Sims, who has held the ACCC chair mantle for over a decade, when he steps down from the role next year. Over the past 25 years, Cass-Gottlieb has been a litigator and headed Gilbert + Tobin's competition and regulation practice. 

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