Consumer Action comment on Royal Commission into the financial services sector

Consumer Action Law Centre says the Royal Commission into the financial services sector will empower people who have been ripped off by the banks, insurers and other financial institutions.

‘This Royal Commission is a welcome opportunity for people to have their say, to share their families’ shocking experiences at the hands of the banks and insurers,’ said Gerard Brody, Consumer Action Law Centre CEO.

‘The problems in the finance sector are numerous. We see irresponsible lending and over-indebtedness causing distress to individuals and families, reckless fee gouging including unjustifiable default fees, and tricky and unfair practices across a range of services. We see people struggling with protracted insurance claims and devastatingly unfair outcomes. The extent of these problems need to be unearthed.’

‘The broad terms of reference for the Royal Commission is positive, and it should bring the banks and insurers into sharp focus. However, it does not seem to cover all credit providers, I think it is unfortunate if non-bank lenders are to be excluded from the inquiry.’

‘The inquiry needs to focus on the inappropriate incentives for banks and financial institutions to return high profits at all cost. This includes remuneration for senior staff which are at eye-watering levels. This is our money the banks hold on trust, they should treat it as such and be regulated so that they act in the public interest.’

‘This should not hold up the progress the government is already making. It is clear we need the Australian Financial Complaints Authority established as planned and the slated reforms to credit cards as soon as possible.’

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