Responsible Lending, BNPL, Royal CommissionWritten on the 18 November 2020 by SAFCA The Financial Counselling sector is involved in a number of campaigns right now, and we would like to say a big thank you to everyone who has contributed by completing a survey, written to the media or politician, and sent in a case study. The response from SAFCA members has been fantastic. We need your help to protect Australia's responsible lending laws. Amid one of the worst recessions in Australia's history, last week the government released a proposed law that would wind back crucial responsible lending laws that protect people from exploitative lending by banks and other lenders. As financial counsellors, we witness the harm of irresponsible lending on our clients. The impact runs wide and deep, effecting the wellbeing of families and children. For many people, over indebtedness is a pathway to poverty. Removing these protections will make the situation even worse. See below to read more and view the campaign kit. Buy Now Pay Later ABC Business online looking for people to interview ABC Business online is looking to interview people who have had issues with Buy Now Pay Later providers for an article. Could anyone recommend someone please? With permission from your agency, of course. It would be very much appreciated, as this could be a great opportunity to raise awareness of the risks that Buy Now Pay Later poses to consumers. Please contact Maura Angle ( maura.angle@financialcounsellingaustralia.org.au ) if you can think of someone. Banking Royal Commission Reforms Welcomed, but Concerns Remain We welcome the introduction of a Bill today in Parliament to prevent hard-sell tactics for insurance and other financial products. The Bill introduces some of the 76 long-awaited reforms recommended by the Banking Royal Commission. But concerns remain about a potential exemption for travel insurance. This would leave people open to unscrupulous sales tactics and being sold unsuitable travel insurance. This is just the next step in a long process. There are still some critical reforms to come in further legislation next year. See the full media release below. Save Safe Lending - We need your help to protect Australia's responsible lending laws. Amid one of the worst recessions in Australia's history, last week the government released a proposed law that would wind back crucial responsible lending laws that protect people from exploitative lending by banks and other lenders. As financial counsellors, we witness the harm of irresponsible lending on our clients. The impact runs wide and deep, effecting the wellbeing of families and children. For many people, over indebtedness is a pathway to poverty. Removing these protections will make the situation even worse. What we can do to protect responsible lending Financial counsellors are a respected voice on this issue and can play an important role in advocating for the protection of these laws. Through sharing our experiences of the harm of irresponsible lending, we will help decision makers understand the importance of these protections and why they need to vote to keep them. We don't have much time, so here's how you can make an impact:
Please find attached:
Together we can protect responsible lending, but it is important that we use our voice and take action today. Thank you for your support.
Wendy Shirley
Banking Royal Commission Reforms Welcomed, but Concerns Remain We welcome the introduction of a Bill today in Parliament to prevent hard-sell tactics for insurance and other financial products. The Bill introduces some of the 76 long-awaited reforms recommended by the Banking Royal Commission. But concerns remain about a potential exemption for travel insurance. This would leave people open to unscrupulous sales tactics and being sold unsuitable travel insurance. This is just the next step in a long process. There are still some critical reforms to come in further legislation next year. See the full media release for more details.
Consumer groups* have strongly welcomed the introduction of a Bill today in Parliament to prevent hard-sell tactics for insurance and other financial products. The Bill introduces some of the 76 long-awaited reforms to strengthen Australian's consumers rights recommended by the Banking Royal Commission. "These reforms target hard-sell tactics for insurance after heart-wrenching stories were uncovered by the Banking Royal Commission," said Gerard Brody, CEO of Consumer Action. "Cold-calling people to sell low-value insurance or bundling junk products in a hard sell should now be stamped out. We congratulate the Federal Government for progressing stronger consumer protections. "At the same time, we have concerns about a potential exemption for travel insurance from some of the insurance reforms. This would leave people open to unscrupulous sales tactics and being sold unsuitable travel insurance, cementing the problems we saw in travel insurance during the COVID crisis. "Commissioner Hayne recommended 'industry-wide' reform as well as abolishing exemptions and loopholes. After a massive spike in travel insurance complaints during the COVID-19 crisis, any exemptions should be time limited and for good-value products only," said Mr Brody. "This is a good start to implementing the Hayne Reforms. We now need to see the enactment of the entire reform package as promised by the Morrison Government in response to the Banking Royal Commission's final report," he said. "Unfortunately, we have seen the Government backflipping on some of their Banking Royal Commission commitments already. In particular, the proposed scrapping of responsible lending protections would directly contravene the very first recommendation by Commissioner Hayne. Reducing consumer protection in lending makes no sense ethically, morally, or economically. It will risk explosive debt and more suffering among our most vulnerable," said Mr Brody. "Today is another positive step towards making sure banks and financial institutions are held to account. We welcome the Government's introduction of key Banking Royal Commission recommendations into Parliament," said Alan Kirkland, CEO of CHOICE. "This is just the next step in a long process. There are still some critical reforms to come in further legislation next year. "In this context, it is astonishing that the Government is proposing to axe safe lending laws. The work of implementing the Banking Royal Commission recommendations is far from done, yet the Government is proposing to repudiate the Banking Royal Commission's first recommendation that safe lending laws should not be amended." *Consumer Action, CHOICE, Financial Rights Legal Centre, Financial Counselling Australia 12 Nov 2020
Author:SAFCA |
