Response to a finance sector Royal Commission: Gerard Brody
In response to the announcement that a Labor Government would initiate a Royal Commission into the finance sector, Consumer Action Law CEO Gerard Brody said:
“A Royal Commission into the finance sector would benefit consumers by focussing on how we can better prevent Australians falling victim to poor conduct in the finance sector, and how we can bring greater integrity and fairness to the culture of our big banks.”
“Politicians and policy-makers can also take this opportunity to establish a last chance compensation scheme in financial advice, and initiate reforms to the insurance sector and credit card lending.”
“The Murray Inquiry’s recommendations promoting product safety in the finance sector, as well as greater powers for the corporate regulator ASIC to amend or ban unsafe financial products should be implemented as soon as possible. There is also a need for greater funding for ASIC to enable it to conduct more proactive surveillance to prevent problems becoming embedded—this was also recognised by the Murray inquiry as part of the proposed industry funding model for ASIC.”
On financial advice:
“Too many investors have lost money following unethical or misleading financial advice, and are unable to get compensation if their financial advisor becomes insolvent. A last chance compensation scheme would provide a remedy, and improve overall trust in the sector.”
On insurance:
“Scandals in life insurance may have been avoided if we had better regulation and oversight of this sector. The prohibition on unfair contract terms that applies to all other consumer products and services needs to be extended to insurance—there is no reason for insurance to receive exemptions from consumer protections.”
On credit card lending:
“The Senate Economics Committee has already recommended that credit card affordability assessments be improved. Implementing this recommendation should really limit credit cards becoming a lifelong debt sentence.”
Read Consumer Action’s Election 2016 Manifesto: A Blueprint For Fair here.
