Submissions

Australia’s credit reporting framework is a fundamental aspect of the financial infrastructure, enabling lenders to assess the creditworthiness of individuals and businesses. However, it is essential to review and adapt this framework to reflect technological, economic, and cultural changes; policy objectives; and consumer expectations. There have been major regulatory and commercial changes in the credit and debt space since the current credit reporting framework was put into place including since the last comprehensive review. The current regime is no longer aligned with Australia’s consumer credit arrangements or with consumer expectations.

Reforming the Emergency Services Levy (ESL) is unfinished business that needs to be resolved to ensure fairer outcomes for consumers and improve insurance affordability. We welcome the announcement that an insurance monitor will be appointed to ensure insurers don’t keep premiums at elevated levels once the ESL is removed. Key to this transition is the creation of a price monitor, independent of industry, and empowered to investigate, conduct research, and collect and collate information relating to pricing practices.

We strongly support treating BNPL as credit and regulating it as such under the NCCPA. Passing the framework contained in the ED Materials represents a dramatic improvement in the oversight of BNPL. Subjecting BNPL providers to a form of responsible lending obligations and empowering ASIC to regulate BNPL as credit is a necessary step that will reduce consumer harms currently being caused by BNPL.

General insurance needs to be urgently reformed to ensure consumers, government and industry work more effectively together to mitigate against various increasing risks. This is particularly the case in a world where insureds have, for decades, misunderstood the insurance products they hold because of long, confusing, incomprehensible, and inconsistent product disclosure. This has led to insureds holding inappropriate products for their risks, unwelcome surprises at claims time, and endemic underinsurance. Standardising insurance definitions and reforming standard cover are key to improving outcomes for insureds in this context.

We affirm our previous support for the designated complaints function, and our previous comments about the design and structure of the legislation in our joint submissions to Treasury and the Senate Legislative Committee.  Our major concern is about the determination’s prescribed limit of just three designated complainants. When combined with other limitations in the determination this will have a serious impact on the function and outcomes of the designated complaints regime.

This supplementary submission aims to provide further information to the committee with respect to two key issues: how the committee can ensure that the insurance sectors acts to improve their processes; and standardising insurance definitions.

Financial Rights believes that the CGC should maintain its focus on claims handling given the continued number of calls from policyholders to the Insurance Law Service seeking advice regarding poor claims handling.

At the heart of the scams regulatory framework must be liability for reimbursement resting with industry. For the reasons and examples outlined in this submission, the only workable framework that will effectively disrupt scams and protect consumers would be a presumption of reimbursement of scam losses, with industry bearing the onus of proof otherwise. The regulatory framework needs to be governed by the key principles outlined in this submission.

In summary we are concerned about the ongoing impact of genetic discrimination on consumers. The current Moratorium on genetics and life insurance fails to adequately protect consumers against genetic discrimination, and does not meet the recommendations of the 2017 PJC Inquiry into Life insurance for an urgent ban on the practice. The Insurance Law Service has received calls from consumers who are concerned about the potential for genetic test results to impact their ability to access life insurance products and manage their and their families’ financial risk adequately. A total ban on the use of genetic results by life insurance companies, without any limits, caps, or exceptions, is the only appropriate policy reform solution to address the legitimate concerns expressed by consumers in this area.

The main goal of the ABA through the review of the Banking Code has been to reduce the reporting obligations on, and oversight of, member banks. This is a bad outcome for consumers. This joint submission responds to Consultation Paper 373 (CP373) with primary focus on the key changes to the Code amounting to reductions in consumer protections that we are most concerned about, particularly: the removal of the commitment in the current code to the clause 49 diligent and prudent banker obligation in regard to general consumer lending. We are concerned this will lead to a significant loss in practical oversight of a key area of banking (and in an area where breaches of the current Code are common); and the removal of the clauses referring to the complaint and IDR processes. We are concerned that not all of these processes are contained in law or regulatory guidance, and their removal significantly reduces the value of the Code as a public facing document.

More transparent data is critical to improve people’s insurance claims and disputes experiences and outcomes. Data is an important tool to hold super funds and insurers to account, and to drive improvements in claims and dispute handling across the industry.

Financial Rights is strongly supportive of a designated complaints function. A designated complaints function recognises the value of complaints from organisations with strong connections to communities, who are able to identify consumer issues at an early stage. Designated complaints will result in problems most affecting Australians being addressed appropriately and in a timely manner.

Financial Rights generally supports the position outlined in the discussion paper and will largely confine our comments to the proposed data dictionary.

Applying the unfair trade practices prohibition to financial services would also deliver substantial benefits to consumers and the broader marketplace, and better align fairness standards, including with the jurisdiction of the Australian Financial Complaints Authority. This reform would particularly benefit First Nations consumers and consumers experiencing vulnerability, given the history of financial service providers targeting people in these groups with unfair trading practices

It’s time for change – it’s time to make unfair illegal
An economy-wide prohibition on unfair trade prac1ces is a vital addition to Australia’s consumer laws. Thereare a range of practces that cause consumer harm, and are detrimental to the competitive process, that are not currently unlawful. These prac1ces have become more prevalent with the widespread uptake of online commerce, while also existing in the offline world.

Joint consumer submission to the House of Representatives regarding insurers’ responses to the 2022 floods. Our findings reveal significant delays and issues in claims handling, inadequate communication from insurers, confusing terms and definitions in home insurance policies, a systemic underinsurance problem and a lack of affordable insurance with premiums on the rise, as well as poor land use planning that requires immediate solutions. All of which have contributed to a complex and increasingly critical situation.

This submission comments on proposed variations to the Privacy (Credit Reporting) Code 2014 (Version 2.3) including:

• Format of the CR Code
• Accommodating other entities reporting CCLI;
• Introducing positive obligations related to statute barred debts;
• Notification obligations;
• ‘Automatic’ requests for credit ban extensions; and
• Enabling correction of multiple instances of incorrect information stemming from one event.

Financial Rights has signficant concerns with amendments made to the Life Code – introduced in transition ownership from the Financial Services Council to the Council of Life Insurers.

A key part of the work we do representing clients is working through the difficulties they may have with identification. Financial institutions, Commonwealth services, telecommunications companies and energy providers require customers to provide identity documents to access their services. However, some people cannot access traditional forms of documentation to prove their identity. This submission provides an overview of these challenges to provide the context for understanding how the Digital ID reforms will impact upon our First Nations clients, before commenting upon specific elements of the proposals.

Financial Rights Legal Centre and Consumer Action Law Centre have consistently called for the banning of screen scraping for over a decade. Screen scraping may have been embedded in business models around the country for responsible lending checks, loan and hardship applications and other purposes, but it has done so in a regulatory gap that has enabled this dangerous and unsafe practice to flourish.

Consumer losses arising out of scams and poor data handling practices and breaches are at record levels year on year, harming the most vulnerable consumers in Australia. With this Australians are growing ever more aware and wary of poor data collection and handling practices. Screen scraping is one of, if not the worst data collection and handling practices being conducted by financial services firms.