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Consumers groups hope that the Royal Bank Commission will give more rights to people who are being granted loans they can not afford, as part of large-scale reforms to put an end to wrongdoing.
The final report of Royal Commissioner Kenneth Hayne, QC, will recommend substantial changes in the banking, superannuation and financial services sectors to avoid a repetition of widespread misconduct that he has attributed to greed.
The report, to be released on Monday, will focus on ensuring that funds are loaned responsibly to consumers, remedying the situation of customers, regulating markets and remunerating bank staff, including executives, brokers and financial advisors.
Financial Rights Legal Center coordinator Karen Cox said consumers needed more legal protections, especially given the complexity of financial services.
"At the end of the day, what we really want is for our financial service providers to really care about their customers and make a profit where it is reasonable to provide services that really benefit people, not to 'exploit their customers,' Cox said.
"If they can find a magic formula to get there, it would be a wonderful thing."
Consumer Action Law Center CEO Gerard Brody said there should be more rights for individuals when money is loaned irresponsibly.
He said that customers could possibly get fees and interest relief, but that they still had to pay back the loan.
Ms. Cox stated that one way to address non-compliance with responsible lending regulations was to define clearer results for those involved.
"I do not expect everyone to get a free house, but a cure for the cure would help to encourage lenders to comply," she said.
"It's obvious that waiting for the regulator to be the cop of every neighborhood in the city will never be enough – we really need to get the right incentives."
Banks have already tightened lending standards in response to the one-year survey and regulators' actions, but the final report is expected to result in further restrictions on the availability of credit to banks, which should to better control the financial situation of customers.
Consumer advocates want loopholes and exemptions in the completed and corrected laws, such as the life insurance exemption from commissions prohibited to counselors.
Cox wants action taken on the sale of "junk" insurance products such as funeral and accident coverage.
"We see clients who have policies that in many circumstances are very bad, sometimes totally useless, and they are often people who have trouble feeding themselves and who pay for unnecessary financial products."
Australian Associated Press
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