There is widespread consumer support for a compensation scheme for victims of financial misconduct according to consumer group CHOICE.
Almost three quarters of Australians (73 per cent) of respondents in a national survey conducted by the group indicated they support a compensation sheme of last resort, while eighty per cent agreed that victims of investment misconduct should receive compensation if they lose money.
The government committed to implementing a Compensation Scheme of Last Resort in 2019 after it was proposed at the Hayne royal commission, but its rollout was delayed during the pandemic. According to CHOICE banking policy advisers Patrick Veyret, this has left consumers in the lurch.
“Justice delayed is justice denied,” Veyret says. “Over 1300 people have had their complaints and compensation awarded paused until the Government passes the scheme. People have lost their entire life savings and are stuck in limbo.”
The results come just a fortnight after a consortium of 15 consumer groups and professional associations united to call for a broader compensation scheme, despite financial services minister Jane Hume recently ruling out any expansion of the planned compensation frameworks arrangment.
While the groups agree with the intent of the scheme, its design has been a sticking point. The scheme is currently set to pay for the outstanding expenses of the Australian Financial Complaints Authority, and has been criticised for not addressing the root cause of unpaid consumer compensation.
There is also concern from the advice industry that a disproportionate amount of funding will need to come from the sector.