A Royal Commission still needed to hold the banks and insurers to account

20 April 2016
A Royal Commission into the financial services sector remains critical to stopping the practice of banks and others putting profits before people and to bring about enduring industry reform, Maurice Blackburn Lawyers said today.

Maurice Blackburn Principal, Josh Mennen says while the restoration of funding to ASIC is welcome, it isn’t the solution.

“These scandals, rip-offs and fraud occurred when ASIC had the higher level of funding.”

“Back in 2014, a Senate Committee recommended a Royal Commission into not only the industry but also ASIC role, stating that ASIC was complacent in its investigations and missed or ignored clear signs of corporate wrongdoing.

“That shows ASIC couldn’t properly police the sector even before its funding cut, so restoring some of that lost funding is not a sufficient response”

“Over the years, Maurice Blackburn has represented thousands of victims of unethical and fraudulent behaviour by the financial services industry. Everyday Australians who are often terribly vulnerable and experiencing enormous financial hardship.”

“A Royal Commission is needed to shine a light in every corner of this industry and bring about permanent change so that banks, insurers and superannuation funds treat their customers with dignity and fairness.”

“Australia urgently needs a Royal Commission because only it will have the power to investigate the deep systemic and cultural problems that have been repeatedly demonstrated to exist within the industry.”

“Restoring funding to ASIC and adding another Commissioner does little to bring about justice and long-term change. Only a Royal Commission can do that.”

Josh Mennen also notes the opportunity to begin reforming the life insurance industry has been delayed with the federal government cutting short the parliamentary sitting.

“While I don’t believe the proposed legislative reform to change how life insurance advisers are paid went far enough, we want to at least see some commitment to reining in the unethical behaviour in that sector.”