Millions awaiting remediation as ASIC calls for improved systems
Around $1.6 billion is yet to be paid to consumers in remediation from failures in the financial system.
Data from the Australian Securities and Investments Commission (ASIC) said at least $5.6 billion had been paid over the past six years. This had included two large-scale remediation programmes including around fees for no service or non-compliant advice and mis-selling of junk insurance.
However, there was a further $1.6 billion yet to be paid to an estimated 2.7 million consumers in 36 remediation activities that ASIC was monitoring across superannuation, advice, credit & banking and insurance.
ASIC had issued updated regulatory guidance to help firms pay remediation in a fair and timely manner.
ASIC deputy chair, Karen Chester, said: “The release of our expanded guidance, along with the updated Making it right field guide, delivers licensees all they need to achieve the right remediation outcomes on their own. It explicitly allows the use of assumptions, to help firms address knowledge gaps and accelerate remediation programs in a way that does not disadvantage consumers.
“Licensees must also do better at identifying and remediating problems earlier to avoid the costly lag and drag of remediation. The common stumbling block we have seen across remediations is underinvestment in systems.
“This underinvestment has led to a trifecta of failures. First and foremost, in delivering on promises to consumers, second in identifying the failures and third in being able to remediate consumer loss in a timely way
AUTHOR
Laura Dew
Recommended for you
The board of Insignia Financial has reached a decision regarding the possible acquisition of the firm by US private equity giant Bain Capital.
Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses.
There has been a 16.3 per cent rise in the wealth of Australian billionaires this year to over $200 billion, UBS finds, as Australian advisers shift their offerings to meet this expansion and service their unique needs.
AZ NGA is looking to triple in size over the next five years as US investment giant Oaktree completes its $240 million investment in the professional services company.
