Today the Government passed the first omnibus bill in the wake of the Banking Royal Commission, which consumer advocates say will help address long-standing problems with unfair insurance contracts, funeral expenses policies and mortgage broking.
The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures) Act 2019 will address recommendations 4.7, 1.2 and 4.2 from the Final Report of Hayne’s Royal Commission including:
- removing the loophole for most insurance contracts in economy-wide unfair contract terms laws, which will stop insurers using unfair terms to deny or underpay insurance claims;
- removing the loophole that exempts funeral expenses-only policies from the Corporations Act; and
- implementing a duty for mortgage brokers to act in the best interests of their customers.
Consumer Action Law Centre (Consumer Action), CHOICE and Financial Rights Legal Centre (Financial Rights) welcome the Bill as an excellent first step that will help to curb the significant consumer harm that has been fuelled by industries who have profited from loopholes and exemptions in Australia’s existing laws. Consumer Action, CHOICE and Financial Rights look forward to working with the Federal Government in the new year to further improve and strengthen this legislation to provide additional much-needed protections for consumers.
“Funeral expenses policies have been sold for too long without proper safeguards, which has resulted in serious harm in Victorian Aboriginal communities. We hope that closing this legal loophole will help to stop these rip offs”, said Consumer Action CEO Gerard Brody.
“We are pleased to see the Government act to implement the recommendations of the Royal Commission, while noting that there are significant reforms still to come.”
CHOICE Media Release. Contact: Jim Hook, 0430 172 669, media@choice.com.au