This was published 3 years ago
Revenue NSW’s automated system took fines from people’s bank accounts
By Lucy Cormack
The state’s debt-collection agency unlawfully used an automated system to claw back unpaid fines from financially vulnerable people, in some cases emptying bank accounts and leaving them unable to buy food or pay rent.
NSW Ombudsman Paul Miller has called for greater transparency in the government’s use of artificial intelligence after Revenue NSW was found to have used the technology to issue garnishee orders, without an authorised person ever overseeing it.
The automatic system took funds from people’s bank accounts and in some cases emptied them completely.Credit: Sarah Keayes
In a report tabled to NSW Parliament on Monday, Mr Miller called for the findings to be made public immediately, having exposed a significant impact on financially vulnerable individuals who had failed to pay fines.
The machine technology was the subject of a spate of complaints and prompted the investigation by the Ombudsman. External legal advice sought by the Ombudsman for the period between 2016 and 2019 found the original automated process used to garnishee bank accounts was unlawful.
Garnishee orders are debt-collecting tools that allow money to be taken from a bank account to recover a debt.
In one unidentified case, a young pregnant mother had her account frozen while the bank complied with a garnishee order from Revenue NSW.
NSW Ombudsman Paul Miller.
The woman, who had two young children and lived in a rural area, lost access to her only source of income from Centrelink and was left unable to pay rent, buy food or travel home until her next Centrelink payment.
Another case involved a woman on a disability support pension who had recently secured social housing after she became the victim of a crime. All money was cleared from her account by the automated system, including a payment from Victims Services.
Mr Miller said affected individuals, whose accounts were sometimes completely emptied, were unaware that automated technology was being used.
“Following our intervention, and to its credit, Revenue NSW took a number of steps to address our concerns about unfairness. However, what it did not do, despite our suggestion ... is seek expert legal advice on whether the use of the automation process was lawful,” he said.
“Ultimately, we decided to seek that advice ourselves.”
The mechanism was deemed unlawful because no authorised person engaged in a mental process of reasoning before an order was issued.
Among steps taken by Revenue NSW to address concerns raised was the implementation of a minimum protected amount, meaning a minimum amount of $523.10 is left in the garnisheed account.
People identified as vulnerable were also excluded from the making of garnishee orders and in March 2019 an additional manual step was introduced, which requires human verification.
NSW Finance Minister Damien Tudehope said garnishee orders are a last resort after a person had been contacted multiple times in writing and given options about overdue fines.
“For those who have chosen to ignore our notices and simply don’t want to pay, the community has an expectation we take action to recover what is owed to the people of NSW,” he said.
“I have asked Revenue NSW for advice and any recommendations on improving our systems in response to the Ombudsman’s report.”
The number of garnishee orders issued by Revenue NSW has leapt from 6905 in the financial year ending 2011, to more than 1.6 million in the year ending 2019.
Government agencies are not required to report when they use machine technology, however the Ombudsman has called for greater transparency about when it is applied.
“Our concern is that agencies act in ways that are lawful, that decisions are made reasonably and transparently, and that individuals are treated fairly. Those requirements don’t go away when machines are being used,” Mr Miller said.
Chief executive of Financial Rights Legal Centre Karen Cox said agencies needed to notify people when artificial intelligence was used in making decisions that affect them.
“NSW should audit all current or proposed artificial intelligence systems and apply a human rights-by-design approach to these systems to ensure consumers are not harmed by these processes.”
Do you know more? Email lucy.cormack@smh.com.au
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