Consumers and small businesses will benefit from additional protections with the start of nine more recommendations from the Royal Commission on Banking, Pensions and Financial Services, and Design and Distribution Obligations (DDO) starting in October 2021.
These reforms strengthen consumer protections by:
- strengthen provisions on unsolicited selling (anti-hawking), including for pension and insurance products, to prevent pressure selling to consumers (recommendations 3.4 and 4.1);
- the introduction of a deferred sales model for complementary insurance products, in order to promote informed purchasing decisions and prevent inappropriate sales of these products (Recommendation 4.3);
- replace the duty to disclose regime with an obligation to take reasonable precautions not to make misrepresentations, ensuring that valid claims cannot be refused for unintentional breaches of information disclosure by consumers (Recommendation 4.5);
- strengthen the breach reporting requirements for financial service licensees in the Corporations Act 2001 and introduce a breach reporting regime for credit license holders under the National Consumer Credit Protection Act 2009 (recommendations 1.6, 2.8 , 2.9 and 7.2);
- require Australian financial services and credit licensees to provide reference checks, ensuring consistent practices across the industry for sharing relevant information about the employment of financial advisors and mortgage brokers (recommendation 2.7); and
- implement the new DDO to help consumers obtain more suitable financial products by requiring issuers of financial products to determine an appropriate target market for those products, and then issuers and distributors being required to sell their products accordingly .
The Morrison government remains committed to completing the implementation of the recommendations of the Hayne Royal Commission on Misconduct in Banking, Pensions and Financial Services and, in doing so, to ensure that Australians continue to do so. have confidence in a strong and efficient financial system.