The Australian Securities and Investments Commission (ASIC) has responded to the banking and financial services royal commission’s ‘unacceptable’ findings.
The royal commission has put significant blame onto ASIC for allowing institutions to go “unpunished” with only $1.3 million of fines issued to banks in 10 years – despite the Commonwealth Bank making nearly $10 billion in 2017.
ASIC says it “welcomes” the royal commission’s interim report, promising to “consider these observations” about its role as a regulator.
In a statement, ASIC says it “will continue to assist the royal commission and to work with the government, the parliament and other regulators to build a stronger legislative, enforcement and regulatory framework with tougher penalties”.
The commission report says ASIC “rarely went to court to see public denunciation of and punishment for misconduct”.
In the interim report, ASIC tells the commission about nearly $90 million in car loans sold to nearly 17,000 consumers using “reliance on fraudulent documentation and breaches of responsible lending obligations”.
The commission also summarises the banning, cancellation, suspension or conditions placed on the licenses of 19 companies or individuals in vehicle finance.
Furthermore, between 2010 and 2018, “over $128 million has been paid in remediation to consumers by financial services entities as a result of particular conduct in connection with add-on insurance”, although this also includes $900,000 in home loan add-ons, compared with the $117 million connected to vehicle loan add-on insurance compensation.
Over 212,000 consumers have been taken advantage of by vehicle add-on insurance products, ASIC says.
ASIC says it will respond in full to the report with a submission by October 26.
Join the conversation