The next step for the royal commission is ensuring that victims get compensation.
Recommendations from the banking royal commission report range from threats of criminal proceedings against culpable banks and individuals to wide-ranging reforms of banking culture and regulation of the sector, but what of the victims of these white-collar crimes?
The first step for victims is to make a claim, which requires legal representation. That’s all well and good for those who can afford representation. What happens to those people who can’t?
Their next most obvious recourse is to make a complaint to the Financial Services Ombudsman, but that office has limited jurisdiction and will most likely recommend that you seek help from Legal Aid – a system that is sorely under-resourced.
Some lawyers in the private sector may take a pro-bono case here and there, but most victims of financial misconduct won’t have that type of luck, unless their losses are so great that a private lawyer can turn it into a media circus.
And while collectively, the losses suffered by victims of fees for no service ‘scams’ are huge, individually, those losses are small, and many will have to wait on the outcome of the $1 billion ASIC civil action to see if they can recover those funds. But, as with all other recommended actions, it will be a long and drawn out process.
For those who fall through all those cracks, the royal commission recommended that the commonwealth establish a compensation scheme – one which the government claims it will set up as a last resort for consumers and small businesses to at least have their cases heard.
And while Treasurer Josh Frydenberg claims this will be paid for by the industry, what of the $30 million the government will pay to around 300 consumers and small businesses for unpaid determinations from the Financial Ombudsman Service and Credit and Investments Ombudsman – a bill that may essentially fall to taxpayers.
Why aren’t the banks paying that bill, too?
There have been a lot of reports about how the report will affect banks and financial institutions, but little has been said of the real victims of these crimes.
In the Friday Flash Poll: Did the royal commission report go far enough?, YourLifeChoices asked its members what they thought of the royal commission report, and 84 per cent believe it did not go far enough towards addressing the crimes committed by these institutions.
Around 80 per cent think victims should be compensated for financial and emotional damage, and 97 per cent believe that banking and finance industry should pay for it. However, 83 per cent are not confident that the victims will be sufficiently compensated.
When asked if the royal commission final report has restored faith in the banking and finance industry, just three per cent said ‘yes, fully’, with 11 per cent saying ‘somewhat’.
The majority of older Australians aren’t convinced the report alone will be enough to improve the sector’s behaviour or reputation, with 37 per cent saying the report did nothing to restore their faith in the industry, a further 23 per cent saying, ‘not really’ and another 23 per cent reserving their judgement for a later date.
Only two per cent say they have always trusted banks and financial institutions.
One thing is for sure, very few people actually trust that ASIC and APRA will do what is necessary to bring the banks back into line, with just four per cent saying the regulators are capable of such a task, 14 per cent saying they are ‘unsure’ and a massive 82 per cent thinking it’s beyond them.
“Sack ASIC and APRA, as for years they have done absolutely nothing. Restructure and give them the power and teeth to prosecute the banks and their employees as the criminals they are, without any influence behind the scenes from the government. That is the only way to keep them working for the interests of the customers and not for greed,” wrote YourLifeChoices member 1984.
“Also, take legal action and recover all past bonuses plus any penalties for wrongdoing from CEOs (and any other senior managers) who are proved to have delivered the problems highlighted by the royal commission. The Government needs to act urgently to produce real outcomes following the RC,” wrote GeorgeM.
As a result, 94 per cent think the government should step in and do more to bring culpable individuals and institutions to justice.
Many YourLifeChoices members agree that banks and individuals should be held more accountable for their actions.
“More individuals should have been named and shamed. The likes of ASIC and APRA are too weak and underfunded to do any meaningful investigation, nor do they have the intestinal fortitude to do so. The Liberals will definitely not do anything, as after all the banks are their mates! Why did they fight tooth and nail to prevent a royal commission? The weasel words currently being bandied about that they will implement the 76 recommendations of the royal commission are only a pre-election stunt that no one will believe. In the end nothing will happen or change once the hue and cry dies down and I think we all know that!” wrote Chaz.
“The best response I read was, ‘if you walk into a bank and steal money, you go to jail, regardless. Bank personnel stealing from customers should likewise go to jail, regardless’”, wrote danielboonjp.
While media attention of the report has been steady over the past week, we’ll see how long it holds over the long and drawn out process of reform of the sector and, most importantly, compensation for the victims of these crimes.
Do you know if you’ve been the victim of these crimes? Is there any justification for taxpayers to foot the bill for the banks’ misconduct?