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Wednesday, 28 March 1984
Page: 796


Senator CROWLEY —Is the Attorney-General aware of the increasing number of proposals by major Australian banks to introduce new systems of electronic funds transfer, known as EFTs, including the announcement yesterday of proposals involving the Commonwealth Banking Corporation? Is the Attorney-General aware of the call by the Chairman of the Australian Law Reform Commission, Justice Michael Kirby, for comprehensive Federal legislation to deal with consumer and privacy issues posed by electronic funds transfers? Is the Government taking any action, or proposing any, to deal with these questions, especially as developments in these matters are currently proceeding apace?


Senator GARETH EVANS —Electronic funds transfer encompasses a range of different technologies and functions among which there is a degree of confusion and among which there are rather different regulatory considerations that may be applicable. The three basic categories of EFT, as I understand it, are these: First, computer clearing houses, for example for interbank money transfers, for the clearing of cheques which is dealt with in the Cheques Bill recently tabled, or for share transfers. The second category is the automatic teller machines which are already widely installed and now very familiar to Australian consumers . The third category on which most of the recent attention has focused is the point of sale machines which allow in effect a plastic card to be inserted in a machine in a shop, the result of which is that money is transferred directly from the customer's bank account to the shopkeeper's bank account. It tends to be that third development which is causing the most concern, certainly in my policy area and that of the Minister for Home Affairs and Environment who is responsible for consumer affairs.

The matters in issue here are: Contractual terms between banks and customers, including liabilities for loss of card, fraud, computer error and so on; consumer protection generally; and questions of privacy relating to rights of access and the challenge to and use of computer stored data. These sorts of matters have been the subject of expressions of concern by Paul Landa, the New South Wales Attorney-General, by Justice Michael Kirby of the Australian Law Reform Commission and by a number of other consumer credit counselling groups and others active in this field to the effect that there is an urgent need for laws to address EFT issues. On the other hand, we had the Martin Review of the Australian Financial System considering this matter recently and saying that there was no pressing need for legislation, although it did recommend the establishment of a committee chaired by the Reserve Bank of Australia consisting of bank and non-bank members to supervise the Australian payments system, especially EFT, to monitor developments and to foster appropriate technological standards.

The Government is giving consideration to this whole question. I have written to the Treasurer recently seeking the speedy establishment of an interdepartmental working party. My Department, and I believe that of the consumer affairs Minister, has commenced consultations with consumer and credit counselling organisations and with interested banks to get details of their views and an understanding of the technology being developed. I have established within my Department a task force which is generally concerned with the implementation of the Law Reform Commission's recent report on privacy which also bears on these issues. It is a rapidly developing field of new technology, as Senator Crowley had indicated. It is not beyong dispute that expensive legal regulation is likely to be necessary in this area. It certainly is something to which we have to give urgent consideration and we are doing just that.