Joint consumer submission to ARCA Credit Reporting Code variations consultation
This joint consumer submission responds to a consultation paper from the Australian Retail Credit Association on variations to the Credit Reporting (CR) Code. There are many CR Code variations that we support and are pleased to see the implementation process begin. While this submission did not respond to all of the consultation questions we did have views on the following proposals: Proposal 6: Accommodating other entities reporting CCLI; Proposal 19: Introduce positive obligations related to statute barred debts; Proposal 24: Notification obligations; Proposal 31: Require a CRB to record and alert an individual of access requests during a ban period; Proposal 37: Enable correction of multiple instances of incorrect information stemming from one event; and Proposals 39-41: Amend the mechanism for corrections due to circumstances beyond the individual’s control.
Joint consumer submission to Treasury re: A Strategic Plan for the Payments System
We consider the safety and resilience of the payments system to require urgent attention and intervention and outline the reasons for this below. The increasing prevalence of fraud and scams operating within our payments system in particular is a major concern for the clients we represent. Our casework experience indicates that there are a number of areas where the digitisation of banking and finance has created gaps in the security of the payment system that scammers can exploit.
Joint consumer submission to Treasury’s Consumer data right in non-bank lending: CDR rules and data standards design paper
This joint consumer submission raises concerns with respect to Treasury’s approach to the Privacy Impact Assessment (PIA) for CDR’s application to the non-bank lending sector and argues for the need to conduct an independent PIA, external to Treasury which proactively consults with key stakeholders including consumer groups and privacy specialists by a reviewer expert and experienced in PIAs, the CDR and the comprehensive credit reporting (CCR) regime.
Joint consumer submission to Treasury re: Regulating Buy Now, Pay Later in Australia, Options paper
This is a joint submission on behalf of 22 consumer organisations who make up the Close Lending Loopholes Coalition including Australia’s leading consumer advocates, charities, community groups, legal centres, family violence organisations, and financial counselling practitioners. Buy now, pay later (BNPL) credit products exploit loopholes in Australia’s credit law to sell people into unaffordable debt. This unregulated credit industry is causing serious economic and social harm to people, families and households across the country. At present, these harms far outweigh the benefits BNPL brings to the economy. We recommend Option 3 be implemented to apply full regulation of BNPL under the National Consumer Credit Protection Act 2009, and the National Credit Code.
Joint consumer submission to the ALRC Financial Services Legislation Inquiry – Interim Report B
Consumer representatives broadly endorse the legislative model for financial services set out in Interim Report B. We agree that reform to the legislative model will aid transparency and ease-of-understanding of the law. We provide support, however, on the basis that the scope of legislation is broad so as to address avoidant business models and that any exemptions and exclusions are as limited as possible.
Joint consumer submission to the Treasury Quality of Advice Review – Conflicted remuneration
Consumer groups are extremely disappointed with many of the proposals suggested by the Review. The Review has been presented with clear evidence that conflicts of interest contribute to poor-quality advice. Every major inquiry into the life insurance industry over the past decade has shown that the industry is plagued with conflicts of interest that contribute to poor quality advice to consumers.
Joint consumer submission to Senate Economics Committee: Financial Sector Reform Bill 2022 – consumer credit reforms
Our organisations strongly support the content of Schedule 4 of the FSR Bill, which would implement the recommendations made in the final report of Treasury’s 2016 Independent Review of Small Amount Credit Contracts.
Joint consumer submission to Senate Standing Committee on Economics re:the Financial Accountability Regime and Compensation Scheme of Last Resort
Consumer groups strongly support the passage of a well-designed Compensation Scheme of Last Resort and Financial Accountability Regime. These reforms are landmark recommendations of the Banking Royal Commission and are missing links in Australia’s financial services framework.
Joint consumer submission to Submission to the Treasury Quality of Advice Review – Proposals Paper
The Quality of Financial Advice Review’s Proposal Paper recommendations would weaken core consumer protections and fuel the provision of poor quality advice by vertically integrated institutions. They would incentivise major banks, insurance companies and superannuation funds to provide conflicted sales pitches dressed up as advice. Consumer groups strongly support the retention of a principles-based best interests duty. This is a critical consumer protection that requires financial advisers to act in the best interests of clients, not their own, and to face significant penalties where they fail to do so. The proposed watering down of the best interests duty to an obligation to give ‘good advice’ will push financial services regulation back decades.
Submission to the Statutory Review of the Consumer Data Right: Issues paper
The implementation of the Consumer Data Right (CDR) needs serious reconsideration in order to place the interests of the consumer back into the centre of the regime – that is their interest in both obtaining benefits from their own data but also – and more importantly – their interest in a safe, secure and trustworthy data handling regime. Currently the CDR is less a consumer data right and more of a right for business to access consumer data, perpetuating an over-reliance on a deeply flawed consent and disclosure model.
Joint consumer submission to the CDR Sectoral Assessment for the Open Finance sector – Non-Bank Lending
The application of the CDR has the potential to provide opportunities for greater financial inclusion if done with appropriate guide rails. However these benefits do not exist in a vacuum. They must be balanced with an understanding of the sector the CDR is about to be applied to and the very real potential for it to exacerbate existing consumer harms and introduce new harms, if not appropriately constrained and mitigated.
It is important to acknowledge that the non-banking sector serves different demographics, functions and purposes in the financial services sector. There are companies operating in this sector that have historically contributed to substantial consumer harm, and are not accountable to industry codes of any real value.
Applying the CDR to the non-banking sector should be done with these issues clearly in mind with risks appropriately mitigated.
Options paper: Possible reforms to the bankruptcy system
This joint submission led by Financial Rights makes 11 recommendations including keeping debt agreements limited to three years. The submission also comments on outstanding issues in personal insolvency and advocates for better support for victim / survivors of family violence. Broad support is given to the proposal to reduce the default term of bankruptcy to one year but advocates for a commensurate reduction in the duration of bankruptcy on credit reports.
Submission to AEMC Protecting Customers Affected by Family Violence
This is joint submission by Financial Rights, ACT Council of Social Service, Good Shepherd Australia New Zealand, the Public Interest Advocacy Centre and Queensland Council of Social Service responds to the Australian Energy Market Commission’s Consultation Paper Protecting Customers Affected by Family Violence. It supports the aim of the proposed rule to “place a requirement on energy retailers to provide assistance and support to consumers who are affected by family violence” but explains deficiencies in the rule. It makes 31 recommendations to address improvements to assist retailers to proactively prevent and respond to domestic and family violence.
Joint consumer submission to ALRC Report 137 – Financial Services Legislation Inquiry – Interim Report A
The genesis for this inquiry was the findings and recommendations from the Financial Services Royal Commission. Consumer advocates endorse the FSRC findings and recommendations about the need to simplify the law, particularly the need to abolish loopholes that facilitate regulatory arbitrage and poor business conduct. This submission does not respond to every proposal and question in ALRC Report 137, but makes comment in relation to: definitions and licensing; disclosure; rule-making, and the approach to exemptions and exclusions; financial advice and debt advice,; and conduct obligations, particular the norm of fairness.
Joint consumer submission to ASIC CP 350 Consumer Remediation – Further consultation
We support a continuing focus on consumer remediation by ASIC in its enforcement. Effective remediation programs are an essential part of the financial services system, enabling timely and efficient compensation for people impacted by the misconduct. Importantly, remediations are a learning opportunity for firms, enabling the firm to understand the causes and impacts of the misconduct and take corrective action to prevent any repetition. The Draft RG is excellent and provides useful guidance and practical examples on how to undertake best practice remediation. We commend ASIC for undertaking this important work, and look forward to its promotion and enforcement across the financial sector. It will also be a useful resource for companies and regulators in other sectors seeking to undertake best practice remediation.
We do however have two serious concerns that require redrafting in the Draft RG regarding public reporting and money unable to be returned to consumers.
Review of the Privacy (Credit Reporting) Code 2014 (Version 2.1)
A submission led by Financial Rights with Financial Counselling Australia, Consumer Action Law Centre, Consumer Credit Legal Service (WA) Inc, Uniting Communities Law Centre, Care, Redfern Legal Centre and Consumer Policy Research Centre. It makes recommendations in response to the review of the Privacy (Credit Reporting) Code 2014 (Version 2.1) including that the OAIC breaks up the Credit Reporting Code into principles-based consumer facing provisions and the technical industry-facing provisions. It would be critical that the consumer-facing principles take precedence in any conflict with the technical provisions and are consumer-tested before being finalised.
ASIC Consultation Paper 354: Relief for simple arrangements following a hardship notice [CO 14/41]
Consumer organisations believe Class Order 14/41 should be allowed to expire in March 2022. This instrument no longer serves a regulatory purpose in light of the major reforms that have taken place in consumer credit reporting. We believe the continued operation of CO 14/41 will create confusion in a regulatory area that is already extremely complex and confusing for all stakeholders. The continued operation of CO 14/41 will have a detrimental impact on consumers, in particular causing harm for consumers that need a notification in writing of the terms of any hardship arrangements they have agreed to, even if they are for less than 90 days.
Joint consumer submission to AGD re: Privacy Act Review, Discussion Paper
Financial Rights and FCA supports the vast majority of the proposals put forward in the Discussion Paper to reform the Privacy Act, which, if adopted will go a long way to addressing the issues faced by consumers of the financial services industry. This submission provide comment on a number of proposals and answers to the questions posed.
Joint consumer response to consultation paper 355: Product intervention orders in credit
Consumer Action Law Centre (Consumer Action), Financial Rights Legal Centre (Financial Rights), the Indigenous Consumer Assistance Network Ltd (ICAN), the Victorian Aboriginal Legal Service and WEstjustice strongly support the interventions proposed in CP 355. Since at least 2018, our organisations have assisted many consumers that have suffered significant detriment caused by credit arrangements using the two multi-contract models described in CP 355. We have provided evidence of that detriment to ASIC over this period – in particular, we provided detailed responses to prior ASIC consultations papers CP 316 and CP 330. We continued to see both models described in CP 355 used to issue many loans in 2021.
Joint submission to National Insurance Brokers Association draft code of practice review
Joint submission with the Consumers’ Federation of Australia to the National Insurance Brokers Association draft code of practice review. We welcome many aspects of the draft Code, such as the commitment that all NIBA members must subscribe to it, the application of the Code to prospective clients, clarity about the limitations of advice, clear communication more generally, the application of the Code to agents, and that where an issue is covered by the provisions of two codes, the higher standards will apply. However there are still a few places where the tone of the previous draft appears to have been retained, with highly hedged statements.