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ASIC has announced that it has lodged an appeal to the Full Federal Court of Australia against the trial decision of Justice Perram rejecting ASIC’s allegations against Westpac Banking Corporation for contraventions of responsible lending provisions of the National Credit Act. Background. ASIC says that it considers that the Federal Court’s decision creates uncertainty as to what is required for a lender to comply with its assessment obligation and that it does not regard…
ASIC has announced that it has issued separate proceedings against the Bank of Queensland and Bendigo and Adelaide Bank concerning unfair contract terms in their small business loan contracts. These are the first actions since its Report 565 which set out the details of the changes made by the four major banks to remove unfair terms from their small business loan contracts of up to $1 million. ASIC contends that certain terms in these contracts…
Treasury has published for consultation a Proposal paper on reforms to the sale of add-on insurance products. The paper outlines the Government’s proposal for an industry-wide deferred sales model for add-on insurance products. It is proposed for the deferred sales model to apply to those insurance products that are offered or sold at the same time as when a consumer purchases the primary product or acquires finance for which the insurance covers associated risks. Add-on…
The ACCC has released its draft report for its customer loyalty schemes review. The review examined consumer and competition issues that are associated with consumer-facing customer loyalty schemes in Australia, including the way in which customer loyalty schemes collect, use and disclose consumer data. It includes financial services and insurance loyalty schemes. The ACCC is concerned about a range of business practices in the customer loyalty scheme industry which have the potential to cause widespread…
An important lesson of the recent responsible lending decision in ASIC v Westpac is that principles-based regulation can be interpreted by a business differently from ASIC’s interpretation and the business’s interpretation can still be lawful as long as it achieves the right outcome. Principles-based legislation relies on general principles to express the outcomes to be achieved by regulated businesses rather than detailed prescriptive rules and processes. If a law does not prescribe exactly what a…
The government has released the final report of the ACCC Foreign Currency Conversion Services Inquiry. Background. The ACCC found that while there were signs that recent competition from new non-bank entrants is delivering better consumer outcomes through lower prices and improved services there is scope for more competition in the supply of international money transfers (IMTs). The ACCC’s recommendations include measures aimed at: reducing a key barrier to entry and expansion for non-bank suppliers…
The ACCC has published the final version of the proposed Competition and Consumer (Consumer Data Right) Rules 2019 that it is submitting to the Treasurer for consent. These rules cover the foundational rules required to implement the Consumer Data Right in banking. The objective of the CDR is to provide consumers with the ability to efficiently and conveniently access specified data held about them by businesses (data holders) and to authorise the secure disclosure of…
The Office of the Australian Information Commissioner has published their report on notifications received by them under the Notifiable Data Breaches (NDB) scheme between 1 April 2019 and 30 June 2019. Malicious or criminal attacks accounted for 151 data breaches in the quarter, while human error accounted for 84 data breaches. System faults accounted for 10 data breaches. Data breaches caused by human error included sending personal information to the wrong recipient via email (35…
The Australian Prudential Regulation Authority (APRA) has updated its Enforcement Approach to include principles that APRA will take into account when considering when and how to publicise its enforcement actions, and guidance on APRA’s approach to enforcement for data submissions.  Background. APRA says it will consider when and how to publicise the enforcement actions it takes on a case by case basis. However, unless there are likely to be risks to beneficiaries’ interests…
Assistant minister for superannuation, financial services and financial technology Jane Hume has announced plans to legislate to provide extra time for existing advisers to meet new Financial Adviser Standards and Ethics Authority’s requirements. Background. Under the new requirements, advisers on the Financial Adviser Register as of 1 January 2019 would have one extra year to complete the FASEA-approved exam (by January 1, 2022) and two additional years to meet FASEA’s qualification requirements (by January…