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32 Bond L. Rev. 1 (2020)

handle is hein.journals/bondlr32 and id is 1 raw text is: 







Treating Vulnerable Consumers 'Fairly'

When They Make a Complaint About

Banking or Finance in Australia

TANIA SOURDIN* AND MIRELLA ATHERTON**


                                Abstract

       The Australian Financial Services Reform Act 2001 (Cth) requires
       that licenced banking and financial services providers establish
       internal dispute resolution ('IDR ) systems complying with
       requirements promulgated by the Australian Securities and
       In vestments Commission (ASIC ). In addition, licence holders are
       required to be members of an ASIC approved External Dispute
       Resolution ('EDR ) scheme so that if a complaint is not resolved
       following the use of internal mechanisms, an external dispute
       resolution facility is available for most banking consumers. In late
       2018, a new EDR body was established, the Australian Financial
       Complaints Authority ( AFCA ), to deal with external complaints.
       The 2018 Royal Commission into the banking and finance sector
       uncovered significant issues in terms of the banking and financial
       sector and raised a number of serious concerns that were largely
       linked to how consumers contracted with banks and other
       organisations however information about existing complaint
       handling arrangements was limited. In particular, there was little
       demographic information about consumers who use IDR and EDR
       arrangements or what factors may be relevant in terms of the
       settlement of complaints and disputes. In this regard, currently
       sections 912A(1)(g), (2) of the Corporations Act direct the form of
       AFSL holders' IDR and EDR systems, but they do not impose any
       obligations on AFSL holders in terms of conduct when providing
       the systems. In terms ofconsumers more generally, itis unclearhow
       many consumers could be classified as 'vulnerable' and may settle
       a dispute on less favourable terms because the impact ofproceeding
       may place them in an even more disadvantageous position. It is
       suggested that better reporting in relation to IDR and EDR activity
       together with targeted independent advocacy services and training
       of relevant staff in respect of the Australian Consumer Law could
       assist consumers and enable more effective reporting ofmisconduct
       issues.


Professor, Head of School and Dean of the University of Newcastle Law School.
Lecturer, Centre for English Language and Foundation Studies, University of Newcastle.

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