The government took a big step in the development of the Consumer Data Right yesterday, releasing a draft bill to introduce action initiation into the system.
Action initiation through CDR allows a consumer to consent to an “accredited action initiator” initiating actions beyond requests for data sharing. This could involve third parties switching accounts or products, making payments or updating contact details across multiple accounts on a consumer’s behalf.
The addition of action initiation to the CDR was the key recommendation of the Inquiry into Future Directions for the Consumer Data Right, which was headed by lawyer Scott Farrell and reported last October.
It has been at the top of the wish list of industry participants since CDR was launched.
According to the summary of proposed changes accompanying the draft bill, the aim of action initiation is to increase the functionality of services and reduce complexity, time and cost for consumers. The government hopes it will also promote competition.
Specific actions, and the data holders that would be obliged to accept action instructions, will be set by ministerial declaration. The minister would also set rules for data and communication standards.
The Farrell review recommended that action initiation be introduced sector by sector after a “sectoral assessment”, which would look at sector-specific regulatory issues and the “digital maturity” of the sector.
There was no reference to this recommendation in the summary.
Two new types of CDR entities would be created - accredited action initiators and action service providers. Accredited action initiators would be accredited by the ACCC and would need to be accredited data recipients.
Action services providers would be existing data holders.
Farrell also recommended that consumer consents be for actions to be taken on an ongoing basis or within time limits, and that consents could be withdrawn at any time.
The summary does not go into detail on this, except to say that “an action could only be initiated with the consent of a consumer”. The ministerial rules will outline specific requirements.