The NSW Productivity and Equality Commission (PEC) has recommended ending commissions for strata managers in its Strata Commissions review report The market impacts of prohibiting conflicted payments released today.
Quotes below are attributable to Alexandra Kelly, Director of Casework, Financial Rights Legal Centre:
“Conflicts of interest have plagued the strata and insurance sectors for years, so there are no surprises in the findings of the PEC report”.
“The PEC has spelled out in black and white that these commissions are insidious - now everyone can see exactly why these conflicted commissions have been such a sore spot for lot owners and consumer advocates, who have stamped out conflicted commissions in other sectors”.
“Strata managers should not be getting paid by an insurer for recommending their products – full stop. Government needs to act quickly to stamp out insidious and unnecessary fees that are exacerbating cost of living pressures on strata owners”.
“The problem does not simply start and stop with strata managers. Other players in this nested doll of self-interest and conflicts of interest include insurance brokers, who have played their own role in delivering poor outcomes for strata owners. The PEC report rightly points out that also restricting those commissions would be beneficial for consumers – and we strongly agree”.
“We also concur that the Federal Government needs to play a role here, and that the exemption allowing conflicted remuneration for strata insurance products should be removed. We call on the Federal government to act on this recommendation immediately, including reviewing all other general insurance products subject to this exemption.
“The ACCC is on notice to take good look at this industry - and state governments need to be vigilant in making sure consumer rights and interests are upheld and protected”.
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About Financial Rights
The Financial Rights Legal Centre is a community legal centre that specialises in helping consumers understand and enforce their financial rights with consumer financial products and services, especially low income and otherwise marginalised or vulnerable consumers. We provide free and independent financial counselling, legal advice and representation to individuals through our following channels:
- Credit and Debt Legal Advice Line 1800 844 949 for those needing legal advice in NSW;
- National Debt Helpline 1800 007 007 – for people needing to talk to a financial counsellor (please note this line is answered by a number of different services around Australia, Financial Rights is one of those services);
- Financial Rights Legal Centre - https://financialrights.org.au/;
- Mob Strong Debt Help 1800 808 488 – our national service for Aboriginal and Torres Strait Islander callers https://financialrights.org.au/mob-strong-debt-help/;
- Insurance Law Service 1300 663 464 – our national service focusing on problems with insurance or debts to insurers.
