Australia Financial Regulation Update: October 10, 2022

ASIC sues Latitude Finance Australia and Harvey Norman Holdings for allegedly misleading interest-free advertising

ASIC is suing Latitude Finance Australia (Latitude) and Harvey Norman Holdings Ltd (Harvey Norman) for promoting interest-free payment methods.

ASIC alleges that ads that included “no deposit,” “no interest” payment options on specific terms for purchases at Harvey Norman were misleading, as they failed to reveal that consumers could only use these payment options if they applied for and used a card. Latitude GO Mastercard. , and that Harvey Norman misrepresented the true costs of these payment options by failing to properly disclose set-up fees and monthly account fees.

The government has welcomed possible policy responses to address Australia’s debanking problem.

Debanking is when a bank refuses to offer or withdraw banking services to a customer, and often occurs in relation to transaction accounts. Debanking is caused by a number of interrelated factors, including AML/CFT laws, sanctions compliance, profitability and reputational risk considerations.

The Council of Financial Regulators document on possible policy responses includes suggestions for:

  • collect unbanking data;

  • introduce transparency and fairness measures;

  • inform major banks of the Government’s expectation that they provide guidance on their risk tolerance and requirements to affected sectors; Y

  • consider increasing financing capacity within the affected sectors.

Discussion paper on the ASIC reportable situations regime

ASIC is consulting with industry participants to address the challenges that have arisen regarding the current reportable situations regime.

ASIC has published a discussion paper that sets out 22 issues and potential solutions that address some of the following:

  1. circumstances in which related reportable situations should be grouped together in a single report;

  2. calculation of the number of reportable situations, the number of instances or the number of affected clients;

  3. use of high-level estimates for financial losses of customers or affected customers;

  4. host upgrade frequency expectations;

  5. quality of default descriptions;

  6. date the licensee first identified that there may be a violation;

  7. report previous similar violations; Y

  8. definition of ‘full investigation’.

APRA: Superfund Outsourcing Can Significantly Impact Members’ Returns

APRA has published information on how super trustees can improve the management of subcontracting agreements.

To effectively monitor and support the measurement of results for members, APRA says best practice requires trustees to clearly define and measure service standards that balance value, quality and efficiency.

When super trustees assess the value for money of related party service providers, APRA said some trustees focused their benchmarking activities too narrowly and thus missed the opportunity to assess, challenge and enhance value. obtained from certain subcontracting agreements.

Hugo Chow also contributed to this article.

Copyright 2022 K&L GatesNational Law Review, Volume XII, Number 283

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