Digital Rights Watch program lead Samantha Floreani told a parliamentary inquiry into the rental crisis on Wednesday that renters were being coerced to handing over a wealth of personally sensitive information to third-party sites, with little to no regulation.
"A lack of protections for rent and digital rights and a largely unregulated rent-tech sector is already hurting renters," she told the hearing in Melbourne.
Ms Floreani said these platforms rarely served renters, and left them with "close to no power" to stand up for their rights in a tight market, and that thousands of real estate agents had admitted to needing support to ensure they could adequately protect data.
This left a raft of data vulnerable to being hacked.
"If they are going to collect that information and use that information ... then it is absolutely vital that they should be protecting that," Ms Floreani said.
"If they fail to do so there should be repercussions."
A survey by consumer advocacy group CHOICE found 41 per cent of renters were pressured to use a third-party platform and about two-thirds of users were uncomfortable with the amount of information disclosed.
But many renters have no choice but to use these platforms.
One renter in the survey said some property agents would only accept applications through these websites.
"It's onerous, dangerous and unfair to tenants to have to provide so much detailed, personal information," she said.
Not only does this put renters' privacy and digital security at risk, it exacerbates pre-existing issues in the rental market like accessibility, fairness, affordability and the power imbalance between renters and landlords.
Some websites like Snug generate a score on each tenants' application which increases if a renter ups their offer, while other platforms have mandatory fees.
The amount of information these platforms provide to landlords also allowed them to gate keep housing and potentially profile and racially discriminate against potential tenants.
CHOICE found an applicant was asked if they identified as Aboriginal or Torres Strait Islander, despite questions about racial identification in private tenancy being prohibited.
In a submission, the First Peoples Disability Network Australia found those who were more identifiable as Aboriginal were less likely to be accepted as rental tenants and those who have their applications accepted were almost twice as likely to be paying more than 30 per cent of their household income on rent.
The committee will hear from renters' associations, public policy think tank the Grattan Institute, property owners groups, homelessness organisations and those with experience of the rental market.
The final report on the rental crisis will be handed down by November 28.
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