Increasing powers and funding for the financial regulator ASIC is a welcome step, providing some security to millions of older people who are too often the victims of poor conduct in the banking and finance sectors.
Leading seniors advocacy organization, COTA Australia, said COTA had been calling for these and other changes for some time and for a reversal of the millions of dollars cut from ASIC’s budget.
“Too many lives have been destroyed by exploitative practices in the finance and banking sectors,” Mr Yates said.
“We have seen scandal after scandal where the banks and other financial institutions put the needs of the consumer far below their drive for profitability.
“Whether through poor advice based on the supplier getting commissions, charging outlandish fees on products or manipulating interest rates, the consumer ends up the loser.
“It’s absolutely critical we have a strong and well-resourced regulator to provide a high level of protection to every consumer.
“While COTA welcomes today’s announcement we reiterate our belief that alongside industry levies to fund ASIC the government should continue to co-fund financial literacy programs, and also financial counselling services and specialist financial services community lawyers.
“COTA believes that there is a public good and a benefit to government in greater levels of financial literacy across all cohorts of consumers of financial services. Therefore we believe a comprehensive financial literacy program should be funded by a mix of public funds and the industry levy.
“COTA welcomes in particular the government’s commitment to implement the following proposals of the FSI and indeed we are disappointed they are not already in place:
a product intervention power to enable ASIC to respond to market problems in a flexible, timely, effective, and targeted way;
product distribution obligations for industry to foster a more customer-focussed culture;
a review of ASIC’s enforcement regime, including penalties, to ensure that it can effectively deter misconduct.
“These should be put in place without further delay.
“Overall COTA welcomes the changes announced by the government today and urges that they be implemented quickly.”
Media contact: Ian Yates 0418 835 439, Olivia Greentree 0439 411 774
COTA Australia is the peak policy development, advocacy and representation organisation for older Australians, representing COTAs in every State and Territory and through them over 500,000 older Australians.