Australia's privacy watchdog will gain the power to fine businesses that fail to protect customers' confidential details, under proposed laws to be unveiled this year.
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The Privacy Commissioner will also be able to audit most organisations - private-sector or government - if he suspects their data is vulnerable to misuse.
Federal Attorney-General Nicola Roxon outlined the plan today as part of Privacy Awareness Week, saying new laws were needed to protect the vast amount of personal data now stored online.
The changes coincide with growing concerns about online security, following several high-profile breaches.
Phone companies Telstra and Vodafone both allowed customer data to become available on public websites recently, while almost 80 million PlayStation users' credit details were hacked last year.
The legislation will also more tightly regulate how direct marketers use personal data, and make it easier for Australians to access and correct information that businesses hold about them.
Consumers will also gain greater power to check the lending histories that credit-rating agencies compile about them.
Ms Roxon said: "There have been big changes to the way we access finance since 1990 when the existing credit reporting provisions came into effect. Many consumers have expressed their frustration at not being able to understand their credit rating."
The federal Privacy Commissioner Timothy Pilgrim, received 1222 formal complaints about alleged privacy breaches in 2010-11, a small increase on the previous year.
He said today that while the internet allowed individuals to make more of their personal information public, many people were worried about the trend.
"You often hear commentary saying 'privacy is dead, you should get over it'. But I certainly don't see that. Concerns in the community are growing."
The commissioner presently has powers to seek compensation from a company if he receives a complaint that it has breached an individual's privacy.
However, the proposed changes would allow him to commence civil legal action against a business if it commits serious or repeated breaches of privacy.
The government has not yet determined the potential financial penalties.
Mr Pilgrim would also be able to initiate "performance audits" of businesses if he felt they presented a privacy risk.
"It will allow us to go in when, say, an organisation is putting in place a new sytem or database that might have the potential to collect a large amount of data," he said.
"If we want to know more about what that means for customers, we will have the ability to audit those systems."
Ms Roxon said the legislation would be tabled in winter.