HSBC Bank pays $33k in alleged CDR breach penalties

HSBC Bank Australia Limited (HSBC) has paid $33,000 in penalties after the Australian Competition & Consumer Commission (ACCC) issued two infringement notices to the non-major bank for alleged Consumer Data Right (CDR) rule contraventions.

The ACCC’s infringement notices were related to supposed failures by the non-major bank to divulge complete mortgage interest rate details and accurate credit card balances in response to separate requests for the data made via the CDR.

The regulator opened investigations on allegations that claimed that HSBC failed to accurately disclose its fixed-rate home loan interest rates, requested via the CDR between at least 20 February 2023 to 25 April 2023, along with not accurately disclosing credit card account balance data from 9 January 2023 to 27 May 2023.

ACCC commissioner Peter Crone stated that if accurate home loan rates are not provided, product data users, “such as comparator sites and brokers”, are unable to present accurate comparisons of home loan products to consumers.

“This has the potential to lead to consumers making decisions based on incorrect information about home loan interest rates on offer,” Crone said.

“For the CDR to be effective, it is critical that CDR data is of high quality. This means that product data and consumer data – which a consumer has consented to share – must be accurate, up-to-date, complete, and in the required format.

“The value of CDR and the importance of data quality is particularly relevant in the current economic climate where Australians are increasingly concerned with cost-of-living pressures and mortgage interest rates.”

Crone further stated that data quality within CDR is a “priority conduct area” for the regulator and that all CDR participants are reminded that “failure to comply with the CDR rules will result in scrutiny by the ACCC and may result in enforcement action, with potentially serious consequences.”

Indeed, the ACCC along with the Office of the Australian Commissioner (OAIC) made the move to prioritise the open banking ecosystem following consultation with stakeholders on the “prevalence of, and harm caused by, data quality issues” in the CDR ecosystem after raising over 280 separate issues relating to data quality with data holders.

The findings from the consultation found that poor data quality was limiting wider adoption of the system and that regulators should be prepared to take a strong regulatory approach to improve data quality.

Following this consultation, the Treasury suspended the planned expansion of the CDR regime to other sectors in order to focus on non-bank lending and bed down the existing regime.

“Through the CDR, consumers can access information and tools using their own data, that help them compare products, manage their personal finances, and make informed decisions about switching,” Crone said.

The non-major bank has reportedly co-operated with the ACCC’s investigation and has taken the steps necessary to improve its CDR compliance. This includes rectifying data quality issues identified through this investigation, the ACCC stated.

The ACCC noted that although HSBC has paid the contravention penalty, it is still not an admission of a contravention of the CDR rules.

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