The Honourable Kenneth Hayne AC QC, during the Royal Commission
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was announced on 30 November 2017, and we have been following it closely ever since. Click here and here to read our other blog posts on the Commission.
After reviewing over 10,000 submissions from the public, and over 69 days of public hearings, the Commissioner Kenneth Hayne submitted his final report to the Governor-General on Friday, 1 February 2019. Today, at 4pm, the details of the final report will be made public.
While we don’t yet know what will be in the report, the Commissioner in charge of the Royal Commission has said the dishonesty and greed are to blame for the suffering of many people around Australia due to the misconduct of banks. The interim report released in September last year said that ‘short-term profit was pursued at the expense of basic standards of honesty’ and cited examples of banks charging fees for deceased estates.
What will be the effects of the Final Report?
The Commission itself can’t press charges or give compensation to victims of misconduct. However, it can make recommendations to the Office of the Commonwealth Director of Public Prosecutions, who made decide to prosecute the misconduct.
It is likely the Final Report will recommend stronger regulation of the current laws, rather than changes in the law itself. The Commissioner has strongly criticised ASIC (Australian Securities and Investments Commission) and APRA (Australian Prudential Regulation Authority) for failing to properly monitor banks and financial institutions, and letting the conduct go unpunished. One change may be greater funding for these regulators, allowing them to monitor institutions more closely and take action when they sniff out misconduct.
Recommendations in the Final Report may also address how the banks pay staff, including their senior executives such as CEOs. There will also be recommendations regarding superannuation and insurance. One possible recommendation is whether insurance companies can ‘cold call’ vulnerable people to sell their product.
What will this mean for you?
We foresee there will be greater transparency around the fees and charges that you are paying, and why you are paying them. Some people have forecast that obtaining credit and loans may become more difficult, as banks become more cautious.
Ultimately the Royal Commission has highlighted how much misconduct has been occurring in the financial services industry. Consumers must be wary and scrutinise their own dealings with banks, superannuation and insurance services, and contact someone if they feel there has been misconduct.
If you have been a victim of a financial service’s misconduct, or have any queries relating to issues featured in this article, please do not hesitate to contact us on 02 8917 8700 or fill out the enquiry box and we will get back to you ASAP.