Legal is not the same as safe when customer details go into AI

Pasting a client’s email into ChatGPT, Claude, Copilot or Gemini to get a reply written takes seconds. Whether that’s allowed depends on your business. Whether it’s wise doesn’t.

Am I breaking the law if I paste a customer’s details into ChatGPT?

Possibly not, and that’s the trouble with the question.

The Privacy Act 1988 still has an exemption for small businesses, based on annual turnover for the previous financial year; that’s how it reads in the current version, compiled on 4 June 2026.1 Some businesses are covered whatever their turnover. The privacy regulator’s list includes a health service provider and a contractor working under a Commonwealth government contract, among others.2

To check which side you’re on, read the small business page of the Office of the Australian Information Commissioner (OAIC), the privacy regulator.2 This isn’t legal advice on your situation.

What about the date going around?

It isn’t in the law. A claim is circulating online that the exemption ends on a set date, and it isn’t in the current version of the Act, compiled on 4 June 2026.1

What happens next isn’t known. The Attorney-General’s Department, which looks after the Act, says it is “working to develop” the next set of changes in “the coming months”.3 I found no new Bill, meaning a proposed law, before Parliament as at 25 September 2026.

If someone sells you a privacy fix with a deadline on it, ask them which section of the Act the deadline is in.

Not illegal isn’t the same as safe

Three reasons I’d act as if a rule already applies to you.

• The regulators say it to everyone. The OAIC recommends that “organisations do not enter personal information, and particularly sensitive information, into publicly available generative AI tools”, meaning AI tools anyone can sign up to online.4 The Australian Signals Directorate, the government’s cyber security agency, tells small businesses to “remove, anonymise or change personal details when using an AI application”, and to read the vendor’s settings because some platforms use what’s entered to train their models.5 Anonymise means taking out the name and anything else that points to the person.
• Some plans learn from what you type. On ChatGPT’s personal plans, OpenAI says “we may use your content to train our models” unless you turn it off.6
• Your customer didn’t give you their details for that. That one isn’t law. It’s whether they’d be happy to see where their details went.

Where a profession has its own rule

Tax agents and BAS agents have one; BAS agents are the people registered to prepare other businesses’ Business Activity Statements, the form that reports GST, for a fee. The Tax Practitioners Board (TPB), which registers tax and BAS agents, says in its guidance TPB GS 55/2026, issued 22 July 2026, that tax practitioners “must obtain permission from each client prior to divulging client information to a third party (which can include entering client information into AI models and tools, depending on how these tools are configured and used)“.7

The rule binds registered tax and BAS agents, not every bookkeeper. As I read it, it sits under their own code of conduct, so the Privacy Act’s small business exemption doesn’t switch it off.7

If your profession has its own regulator or code, look there for a line on AI or on sharing client information. I’ve only read the tax one closely, so I won’t guess at yours.

The one-page rules, in six steps

This is the whole method, and the page at the end is yours to copy.

Step one: pick the tools, and write them down

Name which AI tools staff may use for work, and on which plan. Anything not on the list isn’t used for client work.

Step two: use a business plan, not a free personal one

On the business plans whose pages I’ve read word for word, the vendor says what you type isn’t used to train its AI by default: ChatGPT Business8 and Copilot on a Microsoft 365 work account.9 On ChatGPT’s personal plans it may be, unless you turn it off.6 Claude and Gemini also sell personal and business plans, so check the setting on whichever you use yourself, rather than taking anyone’s word for it, mine included.

Step three: decide what never goes in

Customer names with their contact details, health details, tax file numbers, bank details, and anything a client told you in confidence.

Step four: take names out before you paste

Swap every name for a stand-in, like Client A, and take out phone numbers, emails and street addresses. Put the real details back afterwards, in your own system.

Step five: if you’re a tax or BAS agent, ask first

Get each client’s permission before their information goes into an AI tool, as the TPB guidance says.7 Keep a record of the yes.

Step six: put it up, and check it when things change

Pin the page where staff will see it. Read it again whenever you change tools or plans, or a vendor changes its settings.

The page to copy

AI at [business name]: our rules

We use: [tool and plan]. Nothing else for client work.

Training setting: [off, or not used by default], checked on [date] by [name].

Never goes in: customer names with contact details, health details, tax file numbers, bank details, anything told to us in confidence.

Before pasting: swap names for Client A, Client B; take out phone numbers, emails and addresses.

Tax and BAS agents only: client permission recorded before their information goes in.

Checked again: whenever we change tools or plans.

A made-up example: the fee proposal

This one is made up. A small engineering and building design firm gets an email from a homeowner who wants a fee proposal for a second-storey addition. The email has their name, address and mobile, and a line about a neighbour who is threatening to object.

What goes into the AI assistant: “Client A wants a fee proposal for a second-storey addition to a single-storey house in the Blue Mountains. Write a fee proposal covering scope, what’s included, what’s excluded and next steps, in plain English, using the attached template headings.” The neighbour stays out entirely; it’s private, and the proposal doesn’t need it.

The AI assistant writes the structure and the wording. The engineer adds the fee, the name and the address back in their own template, and reads every line before it goes.

Want it written for your business?

On our menu that’s the card Safe rules for AI in your business: what the AI may touch and what it must never, written down. It sits in our lowest price band, one dollar sign.

Book a free hour.