Financial Services and Consumer Protection

Abstract

In 2010, Australia introduced the Australian Consumer Law by its Trade Practices Amendment (Australian Consumer Law) Act (No. 2). The standard of consumer protection in the provision of financial services is considered in relation to this new legislation and also the further Australian federal legislation: the Australian Securities and Investment Commission Act and the Corporations Act. It is then compared with the consumer protection standards of the common law. The new standards are further tested, firstly, against a new 'product' advertised by the Bendigo Bank in 2010, called the Homesafe Debt Free Equity Release, and secondly, against reform proposals which would prohibit the receipt of commissions by financial service providers. The new Bendigo Bank 'product' raises new implications for the finance industry and for consumer protection. The question is posed: is the ultimate consumer protection in the finance industry a duty of care, owed by the profession of financial services providers, to produce optimum wealth for Australians through a sound and reliable financial system for the consumer?