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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA: ASIC enforcement taskforce recommends tightening bank rules to protect customers. Pure SPIN

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ASIC enforcement taskforce recommends tightening bank rules to protect customers

Sydney Morning Herald April 11 2017 - 12:00am

Sarah Danckert

 

EXCLUSIVE  Banks, financial services houses and credit companies will face public naming and shaming over bad behaviour in a suite of major reforms being considered by the Turnbull government.

However, the reforms put forward by the Australian Securities and Investments Commission enforcement review taskforce do not include naming the executives in charge of the division and the division in which the breach occurred, as recommended by the recent parliamentary inquiry into the banking sector.

The proposed public breach reporting regime will be delivered on an annual basis to consumers and will list the licence holder, i.e. the bank or financial services house, where the breach occurred.

The proposed breach register is part of a wider set of reforms included in a position and consultation paper that will be released by Revenue and Financial Services Minister Kelly O'Dwyer on Tuesday.

The reforms come after a slew of scandals in the financial services industry, including gross misconduct such as forgery, fraud and management cover-up in the financial planning arms of major financial institutions and life insurance companies.

Lax work practices and arcane IT systems have also led to millions being paid back to consumers due to breaches in the administration of superannuation funds, credit card fees and other banking products.

The taskforce was set up last October in response to the scandals and as an alternative approach to the ALP and the Greens, which are pushing for a royal commission into the industry.

Ms O'Dwyer told Fairfax Media the proposals would lead to significant reform.

"It's all about ensuring that we have practical measures in place that ensure that our financial system is strong, that misconduct is exposed and penalties and sanctions apply when that occurs," Ms O'Dwyer said.

"The proposals outlined in this paper are aimed at improving transparency and accountability in the financial services sector by broadening and strengthening the obligations on licensees to make timely reports to ASIC about misconduct or suspected misconduct that they become aware of," she   said.

Under the proposed reforms, the requirement to report misconduct by rogue financial advisers to the Australian Securities and Investments Commission will also be beefed up by expanding the class of reports that must be made to expressly include misconduct by individual advisers and employees.

The taskforce is also considering tightening up breach reporting rules and expanding them to take in credit licensees.

At the moment, banks and other financial services licensees have to report "significant breaches" of the Corporations Act to ASIC. However, there has been considerable ambiguity and subjectivity in what is a "significant breach", with some financial service licensees reporting some breaches and others not depending on their view of the significance of the breach.

The taskforce is instead considering adding an additional test to the significant breach requirement, which includes a more detailed "objective standard" such as used in Britain.

Consideration is also being given to whether breaches should be reported within 10 days of the licensee becoming aware of the breach instead of after the licensee confirms the breach.

Ms O'Dwyer said the public and the government shared concerns about rogue advisers being moved on to other institutions without reports being made regarding their misconduct.

"We want to make sure that any adviser or employee who's guilty of misconduct is appropriately dealt with and obviously not in a position to do harm in the future," she said.

Financial services licensees will also face penalties if they are caught out not reporting breaches to ASIC under the proposed reforms.

Ms O'Dwyer said the taskforce and government was consulting on the naming of executives in charge of departments where breaches occur but there was not many examples internationally where that had occurred.

"But we certainly do know when you increase the public reporting around particular financial institutions in a timely manner that this can have a significant cultural impact on those institutions," she said.

 

The taskforce will provide its recommendations to the government by the end of this September.

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