ASIC accused of encouraging consumers to position to access CSLR

Mike Taylor

Managing Editor/Publisher, Financial Newswire

14 October 2022

The Australian Securities and Investments Commission (ASIC) has been accused of encouraging people to lodge complaints with the Australian Financial Complaints Authority (AFCA) so they can take advantage of the proposed Compensation Scheme of Last Resort (CSLR). 

The accusation was made during a hearing of the Senate Economics Legislation Committee with the Australian Bankers Association (ABA) Christine Culpitt suggesting that ASIC’s posture was not to treat the scheme as one of last resort. 

“And we saw that earlier on this year when ASIC was encouraging customers to make claims with AFCA to potentially benefit from the scheme,” Culpitt said.  

“We would say that is useful information for consumers but worrying in terms of posture of the regulator,” she said. 

Seeking clarification of her statement, NSW Liberal Senator, Andrew Bragg, asked whether she was suggesting that ASIC was encouraging people to make claims to AFCA in advance of the introduction of a CSLR being put in place. 

Culpitt said that was right and that while ASIC had a duty to have informed investors and provide that sort of information, the ABA wanted to see a posture from ASIC on the CSLR which was “about last resort, not second or third resort”.