Lenders told to ‘support customers’ facing hard times
Lenders are being warned to remain within Australia’s corporate watchdog as households face financial difficulties as the country enters an uncertain economic period.
The outgoing chairman of the Australian Securities and Investments Commission will offer the advice in his final keynote address at a conference on Thursday before clearing his desk at the end of this month.
“These are difficult times for many people in Australia, which makes it even more urgent for lenders to support customers experiencing financial distress,” chairman Joe Longo said.
“We are not backing down on this issue and continue to monitor how lenders are supporting their customers.
“And if hardship supports are broken, debt management and credit repair services should not put people in even greater financial difficulty.”
When deputy chairman Sarah Court took over from Mr Longo in July, the commission was charged with high-fee debt management and credit repair services.
ASIC will also publish another report on debt collection and motor vehicle finance later in the year.
“Let me be clear that if a pattern thrives on pressure, transparency or detriment, ASIC will step in,” Mr Longo told attendees at the Australian Financial Adviser conference in Cairns.
Mr Longo, who has been chairman since 2021, also defended the work of the commission, which had to up its game and rebuild trust following negative findings from the banking royal commission in 2019.
The investigation revealed widespread financial industry abuses that harmed consumers and put the regulator on notice for failing to hold firms to account.
“Responsibility works best when it is seen and felt,” Mr. Longo will say in his speech.
“This means regulators cannot work behind closed doors and watchdogs must both bark and bite to be effective.”
Going forward, Mr. Longo said the commission will continue to focus on financial literacy. money smart The website specifically seeks to protect Australians from superannuation scams.
“Recently, we have witnessed unscrupulous actors attempting to siphon significant amounts of money from our pension system in what we suspect is abuse on an industrial scale,” Mr. Longo said.
“Ordinary Australians who signed up for a free supercheck have instead lost their life savings.”
Mr Longo will also condemn the practice of “lead generation” by funds that use cold calling to encourage people to replace their retirement funds with the promise of big returns, often at greater risk.
Recently, this practice resulted in thousands of investors moving into the Shield Master and First Guardian Master funds facing collective losses of more than $1 billion.
He will argue that the federal government, which plans to make changes to superpass, should ban unlicensed communications about retirement.
“We wouldn’t allow someone to perform heart surgery just because they’ve watched too many emergency rooms,” Mr. Longo will say.
“That’s why we must not allow unqualified individuals to persuade Australians to lose their life savings and profit from it.”
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