Financial Rights plays an important role holding businesses and governments to account for both their treatment of customers, as well as their action and inaction where harms are occurring. In the last week, two important decisions have been made that go to the heart of whether business is able to set effective benchmarks for themselves that adequately protect consumers from harm. It seems those who oversee these rules agree with our view that the answer is no.
Turning first to the banking sector: the Australian Competition and Consumer Commission (ACCC) has determined that big banks should proactively move eligible customers into low or no-fee accounts unless they choose to opt out. There was also a welcome requirement removing interest on informal overdrafts. This is an important move that will help thousands of people in the cost-of-living crisis. It will at last place the onus onto the banks to make sure their customers are in the right account, and remedy much of the poor behaviour identified by ASIC’s Indigenous Outreach Program in their Better Banking Reports. Financial Rights and Mob Strong, along with our consumer colleagues, have made multiple submissions to the ACCC process since 2024 pushing for exactly this outcome (in addition to fairer remediation of the $270m in overpaid fees from the absence of this obligation).
The insurance sector also got a reality check from the ACCC. ACCC has released a draft decision to oppose the Insurance Council of Australia’s proposed set of standard definitions for “maintenance” and “wear and tear.” Financial Rights has been leading the consumer movement’s effort to standardise these terms – terms that have led to large numbers of unfair claims denials. It is instructive that the insurance code oversight committee found that over 50% of insurance claims rejected were overturned by the Ombudsman. Financial Rights opposed the ICA’s proposal on the basis that the industry proposed definitions did little to solve the problems faced by consumers. Insurers wasted their opportunity to make insurance fairer for their customers. It’s time for the Government and Assist Treasurer Daniel Mulino to intervene and standardise these terms as soon as possible.
Our message to the banking and insurance industry remains the same: we will work with you to make systems and processes fair for consumers - and we will hold you to account if you won’t.
