The Australian Securities and Investment Commission (ASIC) has today published updated and revised remediation guidance for financial firms with the goal of treating wronged customers fairer and ensuring they repay losses companies have caused in a timelier fashion.
This is a media release from Consumer Action Law Centre (CALC). It was originally published on 27th September, 2022.
Consumer Action CEO Gerard Brody welcomed the announcement saying it should deliver more effective redress to people who have been mistreated, including people experiencing vulnerability.
“ASIC has listened to our calls to put the onus on industry to get on with fair and timely remediations—returning the money they owe to wronged customers—and this is good news,” said Mr Brody.
ASIC’s updated guidance emphasises that remediation scheme design should err on the side of the people impacted, so that compensation covers the true losses caused by the company’s relevant conduct. This includes consideration of how people experiencing vulnerability may have been impacted, as well as indirect losses and non-financial losses that may have resulted from the conduct.
“We particularly welcome the guidance recognising that debt waiver may be an appropriate remedy for unfair lending, and that remedies need to be provided even where someone has become bankrupt following an unsuitable loan,” said Mr Brody.
The Centre also said that the regulatory guidance sets a standard even beyond the finance sector.
“Businesses that are not regulated by ASIC, such as telcos or even car companies, should also apply these best practice principles when required to conduct remediation,” Mr Brody said.
Mr Brody said that Consumer Action lawyers and financial counsellors have had difficulty with some problematic remediations like the Freedom Insurance remediation scheme that left thousands of potential victims out of pocket.
“It’s important that any remediation (whether by firm directly, with oversight of regulator, or through a class action) is comprehensive and fair, otherwise people loose trust and confidence in the framework of consumer protection,” he said.
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