The banking regulator has launched a defence of self-regulation in finance, saying such a system is essential but the industry must lift its game and do "the right thing" by customers, even if it means missing out on business.
Self-regulation has come under fire from consumer groups after the misconduct exposed at the banking royal commission, which showed showed breaches of industry codes often attracted minimal, if any, punishment.
Australian Securities and Investments Commission (ASIC) deputy chair Karen Chester told the conference the regulator was investigating two entities over the sale of the product.
She said ASIC has also intervened by banning "really poor" sales of the product to consumers via outbound phone calls.
In a sign of the more assertive approach of regulators, APRA on Thursday also fined Westpac $1.5 million for late in providing data to the regulator, as it is required to. It was the maximum penalty available, APRA said.
During a wide-ranging discussion, Australian Competition and Consumer Commission (ACCC) chairman Rod Sims told the conference panel that argued that an economy-wide ban on "unfair practices" could also help stamp out poor conduct.
The prohibition on unfair practices was proposed by the ACCC in its inquiry into digital giants Google and Facebook, and the proposed law would set regulators a lower bar to prove breaches than the current laws that prohibit "unconscionable conduct."
“We think that there does need to be a law that deals with unfairness when there’s significant consumer detriment, that would be the essential hurdle,” Mr Sims told journalists.
“It would be just a new criterion that people would have to keep in mind when they’re making decisions about what it is they want to do,” he said.
Read the SMH article