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This is a joint submission made on behalf of:
• Consumer Action Law Centre
• Indigenous Consumer Assistance Network
• Super Consumers Australia
• Financial Counselling Australia
• Mob Strong Debt Help.

Our organisations welcome the opportunity to provide feedback on the proposed changes to the AUSTRAC AntiMoney Laundering / Counter-Terrorism Financing (AML/CTF) Rules (the Rules).

Financial inclusion is critical for reducing inequality, closing the financial gap for First Nations people and protecting and empowering people experiencing vulnerability. While acknowledging the importance of preventing harms caused by scams, fraud, and money laundering, it is our view that financial services providers’ (FSPs) AML/CTF policies are not adequately preventing harm from scams or supporting financial inclusion for people experiencing vulnerability.

Caseworkers report that their clients without standard identification are being treated as ‘high-risk’ under these policies, which is not reflective of their actual characteristics and circumstance. The policies which see scam/fraud prevention and people experiencing vulnerability being assessed according to the same level of risk need to be reconsidered if FSPs are to support economic participation for the whole community.

Our clients, many of whom are experiencing vulnerability, are being denied access to the money held in their bank and superannuation accounts. They are too often turned away from basic banking services that are essential for escaping family violence, or rebuilding after a natural disaster.

In our view, this is frequently due to the overly inflexible and standardized application of the Rules, related internal risk matrices and Know Your Customer (KYC)Policies that FSPs closely guard from public scrutiny.

Our organisations continue to support the purpose of reforming the Rules to improve financial inclusion for people experiencing vulnerability. However, we believe that the new wording of Rule 5-17 will encourage a narrower interpretation of the Rules, ultimately resulting in less people being able to access the essential financial services they need to be able to participate in the economy.

Read the full submission (PDF).