To: ALL AADA MEMBERS
Reports in the media today quoted a statement by Counsel assisting the banking Royal Commission, Rowena Orr QC, which said that the Royal Commission will engage on “… car lending practices that appear to depart from…” standards of honesty and fairness.
The article by Misa Han in today’s Australian Financial Review also quoted extensively from statements made by the Consumer Action Law Centre.
It’s not clear which particular areas of car finance will be scrutinised by the Royal Commission, but the Financial Review article alluded to flex commissions on car loans and the sale of add-on insurance products being in scope.
These matters have been comprehensively dealt with by the Australian Securities and Investments Commission; refunds have been provided and regulations have been issued (or in case of insurance will soon be issued) to address identified poor practice.
We are engaging with Treasury today seeking clarification on the scope and purpose of what may be interpreted as a re-opening of the issues already covered by ASIC.
We will keep you appropriately informed as the matter progresses.