ASIC recently acquired the product intervention power (PIP) allowing them to make timely and targeted interventions in the financial services sector when products are causing significant consumer detriment.
CCLSWA was pleased to collaborate with Australian Shareholders Association, Consumer Action Law Centre, Consumer Credit Law Centre SA, Consumers’ Federation of Australia, Financial Counselling Australia and Financial Rights Legal Centre to make joint submissions to ASIC in relation to its proposed guidance on how this new PIP power should be exercised.
The joint submissions include a range of specific recommendations to ASIC in relation to the exercise of the PIP. The recommendations include:
- Consulting on using PIP should not be overly extensive: if ASIC identifies significant consumer detriment it should be empowered to act swiftly.
- Significant consumer detriment should be defined in the broadest terms possible.
- Defining significant consumer detriment should consider financial and non-financial loss and the impact this has, or is likely to have, on both individuals, and on consumers more broadly.
- Intervention options should be limited and aimed at preventing the detriment identified.
- Consultations should name and shame companies and provide guidance on how to notify affected clients.
- Information on where there are deficiencies or loopholes in the law should also be provided.
The joint submissions include a PIP ‘hit list’, which identifies a range of products causing significant consumer detriment that should be examined further by ASIC. This ‘hit list’ includes the following financial products:
- Funeral insurance and expenses only policies;
- Debt vultures;
- Buy now pay later providers;
- Accidental death and accidental injury insurance;
- Junk ‘dealer-issued’ extended car warranties
- Payday loans;
- Timeshares; and
- Pet insurance.
Click here to read the submissions in full.