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Relief for simple arrangements following a hardship notice

Submission to: ASIC re Consultation Paper 354
Joint consumer group submission (led by Financial Rights Legal Centre) arguing that ASIC should allow Class Order 14/41 to expire in March 2022. The effect of the class order is that credit providers that agree to vary a contract because a person is experiencing financial hardship do not need to notify the person in writing, as long as the arrangement is for less than 90 days (described as a “simple arrangement”). The submission argues that the continuation of the class order will be confusing because of changes to the credit reporting system that require notification to people about financial hardship reporting as well as changes to industry practice.

United Kingdom Consultation on the Buy Now, Pay Later industry

Submission to: HM Treasury, UK
Joint submission from the Consumer Action Law Centre and FCA to HM Treasury in the United Kingdom. The purpose is to share our experience of the Australian regulatory environment, where BNPL operates outside the credit laws that apply to other lending products. This is a similar situation to that in the UK. A key difference in Australia is that the industry here has developed a self-regulatory Code of Practice. The submission outlines the deficiencies with the Code and why it is not an substitute for adequate regulation, includes some observations about other aspects of the operation of BNPL in Australia and makes suggestions about the design of proportionate regulation. The submission is informed by the casework experiences of financial counsellors (called debt advisors in the UK) and consumer lawyers who are increasingly seeing clients who are experiencing various forms of harm when using the product.

Review of the Privacy Act

Submission to: Attorney General’s Department
Joint submission from Financial Rights and FCA (Financial Rights as the lead author) responding to an October 2021 discussion paper from the Attorney-General’s Department considering the scope of the Privacy Act and if its enforcement mechanisms remain fit for purpose. The submission supports proposed amendments to the definition of personal information. The submission argues that the exemption for small businesses from the Privacy Act should be removed including that the Act apply to the new category of “trusted advisors” for the purposes of the consumer data right. (Financial counsellors are trusted advisors.) The submission also argues for the consent provisions to be strengthened, that pro-privacy default settings be enabled by default and that there should be a right to erasure. Complaints handling should be undertaken by the creation of a new body, a Federal Privacy Ombudsman.

Inquiry into corporations’ treatment of Indigenous Australians by the Federal Parliament’s Standing Committee on Indigenous Affairs – joint submission

Submission to: Standing Committee on Indigenous Affairs
This is a joint submission to the House of Representatives Standing Committee on Indigenous Affairs Inquiry into corporate engagement with Indigenous consumers. We outline areas where corporations can improve how they work with First Nations people and communities including examples of best practice in a number of areas.

Regional Banking

Submission to: Regional Banking Taskforce, Treasury
Joint consumer group submission (led by Choice) responding to a consultation on regional banking. The submission recommends that banks commit to a moratorium on branch closures, that in towns with limited or no banking services the banking industry commit to expanding mobile banking and that every town in Australia has at least one fee-free option to withdraw cash. The Taskforce is also encouraged to meet with First Nations communities to understand the particular issues they face.

Compensation Scheme of Last Resort and Financial Accountability Regime

Submission to: Senate Economics Legislation Committee
Joint consumer group submission (led by CHOICE) on the CLSR and FAR. The submission again makes the argument that the scope of the CSLR needs to be expanded to include all financial products that fall under the jurisdiction of AFCA, including funeral expenses policies and managed investment schemes as well as all court and tribunal decisions. The compensation cap for the scheme should be at the same level as AFCA. The FAR needs to extend to executives and senior managers, there must be meaningful consequences for people who break the law, all variable remuneration should be subject to clawback not just a portion and there should be a requirement for executives and senior managers to treat customers fairly.

ePayments Code Review

Submission to: ASIC
Joint consumer group submission (led by the Consumers’ Federation of Australia) on proposed changes to the ePayments Code. Our submission expresses disappointment that ASIC is planning to reduce consumer protection in relation to scams both in relation to mistaken payments and unauthorised transactions. These proposals run counter to ASIC’s 2021-25 strategic plan which include a commitment to reduce the risk of harm to consumers from scams.

Financial Accountability Regime

Submission to: Treasury
Joint consumer group submission (led by CHOICE) on the Financial Accountability Regime Bill 2021. As drafted, the law will not work to hold finance executives to account. The Bill needs to be strengthened to: expand the scope to senior managers, reinstate civil penalties for breaches (which was the Government’s original intention), bolster the deferred remuneration obligations so that all variable rem could be clawed back and impose an obligation on executives and senior managers to treat customers fairly.

Compensation Scheme of Last Resort

Submission to: Treasury
Joint consumer group submission (led by CHOICE). The submission argues that an effective Compensation Scheme of Last Resort should have broad coverage so that it includes any financial service or product that comes within the jurisdiction of the Australian Financial Complaints Authority. It is particularly important that the CSLR cover funeral expense policies managed investment schemes and debt management firms. The compensation cap for the CSLR should be the same as that for AFCA.

Telstra Energy – Application for electricity and gas retail licence

Joint consumer group submission (led by Consumer Action Law Centre) commenting on the fitness of Telstra to be granted a licence to retail electricity and gas. The submission does not oppose the grant of the licence but notes that the culture in the telecommunications industry is not conducive to good customer outcomes and that this could carry over into the utility space. This is a result of inadequate telco regulation that has resulted in ongoing systemic issues, including mis-selling. Telstra needs to make clear commitments that will not see these poor practices in this new market and that will see people who are vulnerable or in hardship, treated fairly.

Treasury Laws Amendment (Measures for Consultation) Bill 2021: Superannuation Information for Family Law Proceedings

Submission to: Treasury
Joint submission, led by Women’s Legal Service Victoria, supporting the passage of legislation that will allow information about superannuation assets to be provided directly to the Family Court by the ATO during property settlements. This will be of significant benefit to women leaving situations of financial abuse and domestic violence, where perpetrators actively seek to hide assets.

Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020

Submission to: Senate Environment and Communications Legislation Committee
While gambling is a legitimate form of entertainment for many Australians, gambling should not be funded by credit. We therefore support a prohibition on the use of credit cards, including via e-wallets, for digital gambling.
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