Submissions

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.

The inappropriately low existing forced bankruptcy threshold results in bankruptcy proceedings being used to aggressively pursue people for very small amounts, in lieu of collection options that are less stressful, humiliating and expensive for the debtor.  This submission, endorsed by 12 consumer groups, argues that:

• The bankruptcy threshold should be $50,000
• Bankruptcy notices should allow a 60 day response period
• Listings on the NPII should align with credit reporting obligations (that is, removal 2 years after the bankruptcy is completed)
• While we support the debt agreement proposals in this paper, there is a broader discussion needed around additional personal insolvency options including a No Asset Procedure.

Financial Rights is often working with consumers wrongly placed in business loans, who ought to have been afforded the protections provided under the National Consumer Credit Protection Act 2009. We also work with clients whose small business and personal finances are intermingled in ways that leads to our working with the limited rights and protections afforded small business borrowers. We welcome AFCA outlining its approach to small business lending.

Currently some AFCA recommendations and even determinations in responsible lending disputes are inconsistent, which has led to some problematic practices and caused unfair outcomes for consumers. The Draft Approach addresses many of the concerns we have with approaches to responsible lending disputes taken at times by AFCA.

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.

We are raising the following two high level concerns with the current Consumer Data Rights Bill and the intent to introduce action initiation processes to the consumer data right regime. Action initiation has the potential to increase scam and fraud activity in the context of few, if any, consumer protections or redress mechanisms for scam losses and it will exacerbate consumer harms borne of an already weak CDR consumer protection framework.

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.