ASIC said it expected compensation to top $100 million and reach 300,000 customers. It said that $51 million had already been paid to more than 186,000 customers.
“We are deeply troubled by the findings in our report, and the stories they tell of unfair practices occurring within Australia’s largest and most well-known financial institutions,” ASIC Commissioner Sean Hughes said.
We also will not hesitate to pursue civil penalties where there has been a failure by any lender or insurer to act efficiently, honestly and fairly.
ASIC’s Sean Hughes
“Lenders and insurers have had more than enough time to improve sales practices and provide better value for consumers. An inevitable consequence of these widespread failings and mis-selling practices will involve ASIC taking significant enforcement action against some of the entities named in our report.”
Mr Hughes flagged that the watchdog was was also investigating a number of the institutions involved “with a view to enforcement action”.
In a statement ASIC said it now expected lenders and insurers to design and offer products with better claim rates and flagged it could step in if the progress is too slow.
“If we do not see early, significant and sustained improvement in the design and sale of consumer credit insurance, our next steps may involve the deployment of our new product intervention power where we see a risk of significant consumer detriment,” Mr Hughes said.
“We also will not hesitate to pursue civil penalties where there has been a failure by any lender or insurer to act efficiently, honestly and fairly. All options are on the table.”
The lenders subject to the ASIC review included: Australia and New Zealand Banking Group; Australian Central Credit Union; Bank of Queensland; Bendigo and Adelaide Bank; Citigroup; Commonwealth Bank of Australia and Bankwest; Credit Union Australia; Latitude Finance Australia and Latitude Personal Finance; National Australia Bank; Suncorp-Metway; and Westpac Banking Corporation.