Mackay Chapman July 2023 ASIC Update

In this month’s ASIC update:

• A review has found that some individuals in high-fee transaction accounts (including some First Nations people) are paying up to $3000 in overdraw fees per year.
• 38 interim stop orders have been issued that relate to 67 pet insurance products.
• The National Anti-Scam Centre is set to coordinate an investment scam ‘fusion cell’. 
• ASIC is calling on superannuation trustees to ensure they are meeting their legal obligations for dealing with incoming money from consumers.

ASIC acts to ensure better banking outcomes for Indigenous consumers

An ASIC review has found that some individuals in high-fee transaction accounts, including First Nations people, are paying up to $3000 in overdraw fees over a year. 

ASIC issued notices to those banks requiring data on fees charged to consumers in locations with higher-than-average proportions of Indigenous people and for customers in receipt of AbStudy payments.

The review also revealed:

• Over 110,000 Australians in locations with higher-than-average proportions of First Nations people - and in receipt of AbStudy payments - are in high-fee accounts, despite being eligible for a low-fee account.
• Said consumers paid over $6 million in fees over a twelve-month period, and this could have been avoided if they were in a low-fee account.
• ‘Overdraw’ fees were the most prevalent, which are not charged on low-fee accounts.

Read more here.

Industry funding: 2022-23 Cost Recovery Implementation Statement

ASIC published its Cost Recovery Implementation Statement (CRIS) for 2022-23. The statement details ASIC’s estimated levies by industry subsector. Final levies will be based on ASIC’s actual cost of regulating each sub sector and the business metrics submitted by entities. Final levies will be published in December 2023 and invoiced between January and March 2024.

ASIC’s budget is set by the Australian Government. ASIC is required to detail how its costs will be recovered from each regulated subsector through industry funding levies and how transaction-based activities will be recovered via fees for service. 

The CRIS includes:

• An explanation of the industry funding model (IFM), including how we allocate costs to calculate the levies and fees for service.
• A summary of our estimated levies by industry subsector.
• Detailed breakdown of our estimated costs and focus areas of our work by sector and subsector.

Read the statement here.

ASIC issues 38 DDO stop orders for pet insurance products

38 interim stop orders have been issued, that relate to 67 pet insurance products issued by The Hollard Insurance Company Pty Ltd and PetSure (Australia) Pty Ltd (the insurers) - across different levels of cover.  

The stop orders relate to pet insurance products issued by the insurers via brands including Woolworths, RSPCA, Petbarn, Guide Dogs, Medibank, Bupa and HCF. ASIC issued the stop orders because of deficiencies in the target market determinations (TMD) for the products.  

Find out more about the stop orders here.

National Anti-Scam Centre’s first fusion cell to disrupt investment scams

The National Anti-Scam Centre is set to coordinate an investment scam ‘fusion cell’, to combat the growing problem of investment scams. Investment scams are currently costing Australians more than $1 billion a year.

The fusion cell will be a time-limited task force led by the ACCC and ASIC, and will include representatives from the banks, telecommunications industry and digital platforms. It will be the first fusion cell co-ordinated by the new National Anti-Scam Centre.

Read more about the fusion cell here.

ASIC calls on super trustees to appropriately deal with member money when it is first received

ASIC is calling on superannuation trustees to ensure they are meeting their legal obligations for dealing with incoming money from consumers, if a new or increased interest in a super product cannot be issued by the next business day.   

The call follows ASIC’s review of a sample of twelve superannuation trustees to understand how they met requirements for dealing with money received for a financial product set out in the Corporations Act 2001. Following the review, all trustees with deficiencies took action of some kind. 

Find out more here.

If any of the above is relevant to you or you want to know more, please feel free to get in touch.

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‍The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.