“Historic moment for consumer financial protection”: CHOICE on the passage of compensation scheme of last resort 

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The Federal Parliament has passed the Treasury Laws Amendment (Financial Services Compensation Scheme of Last Resort) Bill 2023 to establish an industry-funded compensation scheme of last resort for victims of financial misconduct.

Quotes attributable to Alan Kirkland, Chief Executive Officer of CHOICE:

“The introduction of a compensation scheme of last resort is an historic moment for consumer financial protection in Australia.”

“The creation of a compensation scheme was one of the most important recommendations from the Banking Royal Commission. This will make a lasting improvement to the livelihood of people across the country.”

“The compensation scheme has been a missing link in Australia’s financial system and will ensure that many forgotten banking victims will receive the redress they deserve. The industry-funded scheme will ensure that many victims of financial misconduct will receive compensation where it has been awarded but the firm is unable to pay, such as when a firm goes into administration.”

“Consumer groups have been advocating for the introduction of a compensation scheme of last resort for decades. Thousands of Australians, whose complaints have been paused at the Australian Financial Complaints Authority, will now be able to have their cases heard.”

“The Ramsay Review, which first recommended the compensation scheme in 2017, said the scheme should be scalable to include other financial products. Once in operation, the Federal Government should consider whether the scheme needs to be expanded to other industries, including managed investment schemes.”

Source: CHOICE media release, 23/06/2023.