Deputy Privacy Commissioner Timothy Pilgrim says Telstra gave his office the undertaking during discussions after the telco announced it would pay shareholder dividends directly into bank accounts, rather than sending a cheque.
"Understandably, people are concerned about the security of their personal information, particularly where they are being asked for their financial details," he says.
Telstra irked many of its shareholders by announcing it will only pay dividends by direct credit into bank accounts from January 2004.
The Australian Shareholders Association says it is sympathetic to Telstra's need to reduce the cost of posting cheques to its tens of thousands of shareholders but it is concerned that forcing shareholders to provide their bank account details creates security risks and increases the likelihood of fraud. Telstra maintains direct credit lessens the risk of fraud rather than increases it. It's also up to seven times cheaper to pay dividends by directly crediting them to shareholders' bank accounts. Telstra insists the move is not just about cost-cutting.
Mr Pilgrim says the Privacy Act does not prevent Telstra asking shareholders for their bank details to pay dividends electronically.
"Telstra has confirmed to the Office of the Privacy Commissioner that the new policy will be implemented in a way which complies with all relevant privacy obligations," he says.
Telstra is not alone in moving towards direct credit, with up to 200 other companies expected to do likewise by 2005.
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