The final findings of the Royal Commission have been handed down to much fanfare. While there have been a few headline grabbing consequences, many ordinary consumers have been left wondering if the recommendations will have any affect on their financial arrangements.
While many consumers were disappointed with the apparent lack of penalties for apparent malfeasance by bank corporations, the recommendations of the Royal Commission will have a real impact on bank-consumer relations.
Some of the most notable changes that will have lasting impact on consumers are:
- Fundamental changes to the way Mortgage Brokers act. The Royal commission has recommended
that the way brokers get paid be transferred from the banker to the
consumer. While, on the face of it
this would appear to add costs on to the consumer, the Royal Commission
has found that often Mortgage brokers have been acting in the interests of
the bank rather than the consumer.
The change aims to deliver lower overall loan costs to consumers.
Trailer commissions for mortgage brokers are also likely to be removed. Trailer commissions essentially encouraged brokers to act in the best interests of the bank rather than the client.
- The Royal Commission uncovered many instances of annual fees being applied for services received once. The recommendations of the commission will make this practice obsolete.
- Car sales people will now be subject to consumer credit protection laws. The Royal Commission found that many consumers were being charged over and above market rates by car sales outlets acting on behalf of financial institutions
- Other areas impacted will be insurance claims, with financial institutions being subjected to greater scrutiny when denying claims, all forms of funeral insurance being subject to legislation and greater protection for farms in times of drought and natural disaster.
If the Royal Commission’s findings and recommendations are implemented by the government substantial benefits will be delivered to the consumer.