The Federal Privacy Commissioner Malcolm Crompton has criticised the use of "bundled consents" which some of Australia's largest companies including telcos, banks and airlines typically use.
Claiming bundled consents are not good privacy or business practice and "totally contrary to the spirit of the Privacy Act", Crompton warned the issue will be tackled as part of a two-year review of the legislation in 2003.
Privacy Consultant at Aulich and Co, Terry Aulich, said IT companies, insurance firms and telcos are the worst offenders when it comes to bundled consent.
For example, he said information provided to Telstra is disclosed to a range of outside sources such as telemarketing groups and debt recovery companies, but they are purposely listed together to obtain bundled consent from customers.
Aulich said airlines and banks are "arrogant" when it comes to privacy with loyalty programs like frequent flyer points combining credit card information for a "range of purposes".
He said the information provided to banks for personal loans is owned by the bank regardless of whether the loan is approved.
The Privacy Commissioner said bundled consent is a problem that is not going to go away unless the organisations involved stop doing it voluntarily or are "forced".
"It should not be conditional upon the individual giving consent for any other form of information handling practice," Crompton said.
"Where the exchange of personal information for a service is necessary, the information collected should be required to undertake that particular service -- this is the whole thrust of National Privacy Principle One. If the organisation wants to use that information for a purpose other than that for which it was collected, then the individual's consent should be sought for the extended use of that information, but it should not be made a condition of the original service."
Crompton is meeting with peak industry organisations in coming months to resolve the issue before the two-year review of the Privacy Act which could lead to legislative amendments such as tougher penalties to address the problem.