Mackay Chapman

ASIC has taken action against National Australia Bank (NAB) for failing to support 345 customers who applied for financial hardship assistance between 2018 and 2023. These vulnerable customers, including victims of domestic violence and individuals facing serious health issues, were not provided the timely help they needed under the law. Chair Joe Longo stressed that NAB's failure to meet its legal obligations compounded the hardships of these individuals, highlighting the importance of lenders complying with financial hardship requirements, especially amidst rising cost-of-living pressures. ASIC is now seeking penalties and other orders against NAB and its subsidiary, AFSH Nominees, as part of its ongoing focus on financial hardship misconduct. This action follows a broader push to improve the treatment of customers in financial distress, as detailed in ASIC’s 2024 hardship report. #ASIC #FinancialHardship #ConsumerProtection #NAB #DebtSupport #Lending

From all of us here at Mackay Chapman, wishing you and yours a peaceful holiday season. We’ll be taking some time off to recharge with loved ones, so we can be at our very best come the New Year.

In this month’s ASIC update: - ASIC announces enforcement priorities for 2025; - NAB faces legal action over failure to support customers in financial hardship; - ASIC releases draft guide for new sustainability reporting regime; - Deputy Chair Sarah Court highlights a focus on protecting consumers in the credit system; - & ASIC takes urgent action in ALAMMC Developments investigation. Head to the Mackay Chapman blog for more.

ASIC warns investors of a significant rise in reports of stolen shares due to identity theft, particularly since August 2024. Fraudsters impersonate individuals to sell shares, often without the victims' knowledge until they receive confirmation letters from share registries. Individuals affected by data breaches should remain vigilant, as personal information can be exploited. ASIC advises investors to regularly review their share portfolios, use strong passphrases, enable multi-factor authentication, and secure their mailboxes. If you notice any suspicious activity, act promptly by contacting your stockbroker or share registry, and consider reporting the incident to Scamwatch. For further assistance, contact IDCARE, a government-funded service for identity fraud victims. More tips can be found on the Moneysmart website.

ASIC has issued a warning to financial services and credit licensees regarding the potential governance gap in the wake of increasing AI adoption. In its first market review, ASIC found that while AI use is primarily aimed at supporting human decisions and improving efficiency, nearly 60% of licensees plan to expand their AI usage, raising concerns about consumer impact. Key findings indicate that almost half of the licensees lack policies addressing consumer fairness or bias, and even fewer have guidelines on disclosing AI use to consumers. ASIC Chair Joe Longo emphasised the importance of updating governance frameworks to manage risks associated with AI, such as misinformation and bias, which could harm consumers and undermine market confidence. Licensees are encouraged to proactively align their governance practices with existing obligations and to implement appropriate safeguards before deploying AI technologies. ASIC will continue monitoring AI adoption in the financial sector to ensure consumer protection and the integrity of the financial system.

The ACCC has initiated legal proceedings against Optus, alleging the company engaged in unconscionable sales practices and pursued debt collection from vulnerable consumers. Optus is accused of selling unnecessary and unaffordable products to individuals facing financial or mental challenges, including First Nations Australians and those from culturally diverse backgrounds. Sales staff, incentivised through commissions, allegedly pressured customers into purchases, with some contracts created fraudulently or without proper disclosure. Despite being aware of these issues, Optus is alleged to have failed to act or compensate the affected consumers. The ACCC is now seeking penalties, redress, and a compliance program from Optus. So, what steps should businesses take to protect vulnerable consumers and maintain fair sales practices? This case highlights the importance of clear communication, ethical sales incentives, and proactive remediation when issues arise.

In this month’s APRA update: - APRA publishes 2023-24 Annual Report; - International Bank of Australia’s restricted banking licence revoked; - APRA increases transparency of super fund expenses; - Operational risk financial requirements amended for superannuation trustees. Head to the Mackay Chapman blog for more: https://lnkd.in/gSRSvvyk

What has #ASIC #enforcement been up to? The #MackayChapman October 2024 enforcement wrap is on our website and can be accessed below. Put together by director Dan Mackay and associate Wilfred Cheng, the wrap gives you a summary of ASIC enforcement actions and outcomes for the month. Check it out below #ASIC #regulation #regulatory #regulatorylaw #regulatoryenforcement #corporationsandsecurities #financialservices

The latest Mackay Chapman ACCC Roundup is live. Head to our blog to read now: https://lnkd.in/gSRSvvyk

The Federal Court has ruled that Latitude Finance Australia and Harvey Norman Holdings Ltd engaged in misleading conduct regarding a national advertising campaign for a 60-month interest-free payment method. The ads, running from January 2020 to August 2021, failed to disclose that consumers were required to obtain a Latitude credit card, which could lead to unexpected financial obligations. ASIC found the advertisements misleading, as they did not adequately inform consumers about the associated costs and the nature of the credit arrangements. The Court determined that consumers were misled about the financial implications of the payment method. ASIC will seek pecuniary penalties against both companies.