Australia's privacy watchdog is investigating whether credit reporting giant Veda Advantage has broken the law by selling sensitive personal financial information to marketing companies.

Key points: Veda maintains database of credit histories of 20 million people in Australia, New Zealand

Veda maintains database of credit histories of 20 million people in Australia, New Zealand Victorian woman "received mail from lenders" after refinancing mortgage, complained to OAIC

Victorian woman "received mail from lenders" after refinancing mortgage, complained to OAIC Veda to reply to OAIC questions this week

Under the Privacy Act, it is illegal for credit reporting agencies to share the contents of consumers' personal credit reports for marketing purposes.

Veda, which was bought by the US credit reporting giant Equifax for $2.5 billion earlier this year, maintains a database of the credit histories of 20 million people in Australia and New Zealand.

Every time a consumer applies for a loan, credit card or utility service, or they default on a debt, Veda enters a record on their permanent credit report.

The Office of the Australian Information Commissioner (OAIC) opened an investigation into Veda's data marketing subsidiary Inivio last month, after a complaint by Victorian woman Kylie Miller.

Ms Miller said she began receiving offers of credit from various lenders the mail last year shortly after refinancing her mortgage.

After investigating how the lenders obtained her name and address, Ms Miller said she discovered they had been sent an alert by Inivio.

"Inivio … actually sells all your personal information to finance companies and other interested parties through these commercial arrangements, such as the one that they presumably had with ANZ and the other finance companies that I was getting mail from," she told 7.30.

Ms Miller complained to the OAIC last year, and the commissioner has since confirmed it is investigating the case.

"Ms Miller is of the view that she has never given her consent for any of her personal information to be collected or shared by or with third parties by Veda," the OAIC said in a letter to Veda, obtained by 7.30.

"If the information supplied by Ms Miller is correct, Veda may not have met the requirements of … the Act by using or disclosing her personal and/or credit information for the purpose of direct marketing.

"Did Veda disclose Ms Miller's credit information and/or personal information to any third party? Please be specific.

"Did Veda disclose Ms Miller's credit reporting information to ANZ as alleged? If yes, how was this disclosure authorised under section 20G [of the Privacy Act]?"

Veda declined an interview and would not comment specifically about Ms Miller's case.

"In regard to our Inivio marketing services, information is used within the constraints of the Privacy Act, from sources as permitted under the Australian Privacy Principles, or where consent has been provided by the individual, either directly or through a third party, to be contacted with offers," the company said in a statement.

"Individuals may opt out of receiving marketing communications at any time."

Australia's Privacy Commissioner Timothy Pilgrim said the law around credit reporting was clear.

"There are strict provisions that restrict those organisations from being able to use that info for direct marketing purposes. It's just not allowed under the Privacy Act," Mr Pilgrim said.

Veda is due to reply to the OAIC's questions this week.