Financial Services Minister Stephen Jones is urging for legislation on the Compensation Scheme of Last Resort (CSLR) to be passed by parliament this month.
“These are important protections for consumers, and they have waited long enough,” Minister Jones said in a statement on Monday.
At present, there are approximately 2,000 cases on hold with the Australian Financial Complaints Authority awaiting passage of the CSLR, and in another 30 cases, compensation has been awarded but can’t be paid until the scheme has been established.
“If the CSLR bills are not passed this month, consumers will be waiting until 2024 to receive compensation,” Minister Jones said.
“Similarly, the longer the wait for the FAR goes on, the more uncertainty there will be amongst the financial industry about the obligations that will be imposed upon them.”
Minister Jones noted that the legislation will provide an avenue of redress for victims of financial misconduct and make executives more accountable for the conduct of financial institutions.
“These measures will strengthen our financial system. They are supported by trusted consumer advocates such as Choice and are a direct response to some of the revelations heard at the Hayne Royal Commission,” he said.
“It’s time to get these things done.”
Bad legislation that provides no certainty and retrospectively encourages more insurers to walk away from providing PI cover. Putting a constantly to be reoplenished bucket of money in the hands of AFCA who rather than seek to provide the avenue for dealing with losses make ridiculous hindsight compensation findings is just asking for the continuing run of ridiculous and unchallegable findings. This will be a very big nail in the coffin of the IFA market.
Oh really? When will they realise that unless there are advisers working there is no need for a compensation scheme? The constant delays of the education requirements legislation, the QAR report (and the list is endless) all lead to higher pressures and less advisers providing the advice at levels required. The few remaining now have to pay compensation as a priority – another nail from a Government out of its depth and unable to make decisions that help the process.
Jones & ALP, why have you not included MIS in CSLR ?
MIS make up over half of the unpiad AFCA complaints yet you allow them to get away without recourse.
DISGUSTING LEGILSTAION !!!!!!!!!!!!!!
It’s a bad piece of legislation that punishes good law abiding advisers and rewards all advisers (and non advisers) that rip off clients. So of course it will pass. It’s great clients are given greater protection by why should advisers doing the right thing have to fund a system so the likes of Dixon’s can run away from their responsibilities.