Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

At the request Senator Pratt and Senator Storer, of I move:

That the following matter be referred to the Legal and Constitutional Affairs References Committee for inquiry and report by 8 April 2019:

The ability of consumers and small businesses to exercise their legal rights through the justice system, and whether there are fair, affordable and appropriate resolution processes to resolve disputes with financial service providers, in particular the big four banks considering:

(a) whether the way in which banks and other financial service providers have used the legal system to resolve disputes with consumers and small businesses has reflected fairness and proportionality, including:

(i) whether banks and other financial service providers have used the legal system to pressure customers into accepting settlements that did not reflect their legal rights,

(ii) whether banks and other financial service providers have pursued legal claims against customers despite being aware of misconduct by their own officers or employees that may mitigate those claims, and

(iii) whether banks generally have behaved in a way that meets community standards when dealing with consumers trying to exercise their legal rights;

(b) the accessibility and appropriateness of the court system as a forum to resolve these disputes fairly, including:

(i) the ability of people in conflict with a large financial institution to attain affordable, quality legal advice and representation,

(ii) the cost of legal representation and court fees,

(iii) costs risks of unsuccessful litigation, and

(iv) the experience of participants in a court process who appear unrepresented;

(c) the accessibility and appropriateness of the Australian Financial Complaints Authority (AFCA) as an alternative forum for resolving disputes including:

(i) whether the eligibility criteria and compensation thresholds for AFCA warrant change,

(ii) whether AFCA has the powers and resources it needs,

(iii) whether AFCA faces proper accountability measures, and

(iv) whether enhancement to their test case procedures, or other expansions to AFCA’s role in law reform, is warranted;

(d) the accessibility of community legal centre advice relating to financial matters; and

(e) any other related matters.

Anne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I seek leave to make a short statement.

Scott Ryan (President) Share this | Link to this | Hansard source

Leave is granted for one minute.

Anne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | Link to this | Hansard source

It was this government that called the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. It was this government which responded within four days of receiving the final report and committed to taking action on all 76 recommendations. In a number of important areas we're going further. We have committed to expanding the remit of the Australian Financial Complaints Authority for a period of 12 months to accept applications for disputes dating back to 1 January 2008, the period covered by the royal commission, for disputes that fall within AFCA's threshold. The government will also establish a compensation scheme of last resort to ensure that consumers have their cases heard and can be confident that where compensation is owed it will be paid. This will be a scheme paid for by industry, reflecting their obligation to right their wrongs. In addition, we are strengthening oversight and transparency of financial entities' remediation activities by enhancing AFCA's role in the establishment and public reporting of firm remediation activities. Rather than calling for another inquiry to distract from the fact that the Labor Party is yet to provide— (Time expired)

Question agreed to.