Login
ISCOVER
The MFAA has written to the Treasury urging government to extend unfair contract protections to small business borrowers.
In a submission to the government in response to the Financial System Inquiry (FSI) final report, the MFAA has thrown its support behind David Murray’s recommendation to extend unfair contract term protections to small businesses.
The industry body argued that the extension should “augment the limited protections afforded small business owners”.
“There appears to be a view that small business owners are more likely to be more sophisticated in financial management including in borrowing,” the MFAA said.
“In reality, the majority of small business owners depend upon advice from relevant professionals including brokers, accountants and lawyers, but will very often depend upon their own perceptions and assumptions about the validity of terms in standard contracts in much the same way that consumers do, resulting in an enforced acceptance of sometimes inappropriate contract terms from organisations with which they are forced to do business."
In addition, the MFAA said it “strongly supports” the FSI report’s drive to enhance competition by recommending a ‘review of the state of competition in the sector every three years, improve reporting of how regulators balance competition against their core objectives, identify barriers to cross-border provision of financial services and include consideration of competition in the Australian Securities and Investments Commission’s mandate.’
[Related: Industry bodies unite in fight for SMSF lending]
