The financial services royal commission uncovered rivers of gold that had been flowing into the coffers of financial institutions and advisers, but unconscionably.
Commissioner Kenneth Hayne was scathing in his final report. Among his 76 recommendations was the establishment of an industry-funded Compensation Scheme of Last Resort (CSLR) to compensate victims of companies that had gone broke after giving clients misleading advice.
The scheme was to be run by the Australian Financial Complaints Authority (AFCA), which has already indicated that many complainants were entitled to significant payments.
The federal government was totally on board and committed to introducing the scheme by the end of 2020. COVID messed with that deadline and it was pushed back to 30 June 2021. That deadline has also passed with no action.
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Consumer advocacy group CHOICE is now heaping further pressure on the government to finally act when Parliament returns in August.
CHOICE CEO Alan Kirkland told The New Daily: “We would say this issue is probably the most important recommendation of the banking royal commission, and it should be one of the biggest priorities.
“In a practical sense, the delay means that there are people who are entitled to compensation, because that’s been [ruled] by the financial complaints authority, and that compensation is not being paid.
“And there are other people whose complaints have never even been heard by the Australian Financial Complaints Authority because of these delays.”
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There is no doubt that hundreds, perhaps thousands, of duped clients are owed compensation and that all relevant parties – and the government – are on board. Yet the delays continue.
AFCA had been working through and tabling complaints – with some complainants out of pocket to the tune of $200,000 because of dodgy financial advice – but because of government inaction on legislating the CSLR, it put any further interviews on hold.
The ABC reports that an AFCA spokesperson said it “did not feel it was right to ask consumers to invest considerable time and energy in pursuing such matters until it was clear there was a prospect that they may be paid compensation if awarded”.
Mr Kirkland said CHOICE was “puzzled” by delays to the scheme as families were waiting on hundreds of thousands of dollars in compensation.
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“We’ve been reasonable about timelines the whole way along,” he said. “We knew this was complex. We knew that there were some delays due to COVID.
“But now the government has had over 28 months since the royal commission handed down this recommendation, and we think that’s more than enough time. So there is no justification for any further delay.”
Treasurer Josh Frydenberg has told TND that the Morrison government “remained committed to swiftly implementing the recommendations of the Hayne royal commission” but was forced to delay some measures due to COVID-19.
Have you been pleased with action on recommendations from the banking royal commission? Is it sufficient to blame COVID for delays? Why not share your thoughts in the comments section below?
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