Kenneth Hayne's Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, brings into play ideas surrounding collective humanistic values and goals, and natural law principles based on commonly understood ethics and moral standards.
In his introduction, Hayne notes that the central task was to report on 'whether any conduct of financial services entities might have amounted to misconduct and whether any conduct, practices, behaviour or business activities ... fell below community standards and expectations'. The conduct identified and described in the report has often 'broken the law. And if it has not broken the law, the conduct has fallen short of the kind of behaviour the community not only expects of financial services entities but is also entitled to expect of them' (emphasis mine).
What is striking about the report is how the banking, superannuation and financial services industry has dehumanised consumers, particularly marginalised consumers, and those individuals within the industry providing the services at the frontline. Greed and self-interest — whether at a corporate or individual level — motivated much of the misconduct detailed in the report.
Some of the worst examples, from the multitude of cases surveyed, include the charging of 'fees for no service' (deducting fees from consumer accounts, including superannuation fund accounts, for services that were not received, including fees charged to deceased customers for life insurance); one of the Big 4 banks selling 'junk insurance' products to tens of thousands of customers, including dole recipients; and Indigenous people and people from lower socio-economic groups being subjected to high-pressure selling of 'junk insurance' or funeral products, and high-interest loans.
Meanwhile, rural customers had the terms of their loans amended without notice or consultation, their properties revalued or foreclosed and subjected to forced sales without due consideration of their specific circumstances (such as the timing of key harvests); and problem gamblers or those suffering lingering credit card debt were offered credit limit increases or additional cards.
The report outlines a staggering 76 recommendations arising out of the inquiry. Some of the more critical recommendations for retail consumers, particularly marginalised consumers, include the following.
Mortgage brokers: a new 'best interests duty'
At present, mortgage brokers are generally remunerated by way of an upfront commission from a lender as well as a trail commission based on the size of the relevant loan, giving rise to conflicts of interest between brokers and the consumers they ostensibly act for. The report recommends