New complaints power must be ‘measured’, say associations

The move has been welcomed by business advocacy group, the Council of Small Business Organisations Australia (COSBOA), whose chair Matthew Addison told The Adviser: “COSBOA and its members support this move of formalising a process for associations to represent their communities in this manner.

“Associations strive to ensure best practice, development, productivity and fairness in their respective environments.

“This formalisation of a process for us to have matters considered properly by the ACCC further develops collaboration and effective business environment.”

Similarly, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Bruce Billson, said he had been calling for, and “very much welcomed”, the establishment of a super complainants mechanism.

“Our role sees us on the front-line of assistance to small and family businesses harmed by commercial disputes or likely breaches of fair competition, industry code and reasonable conduct regulatory provisions. Small and family businesses need to have confidence in the regulatory framework and this includes that egregious conduct will be investigated.

“A super-complainants mechanism for dispute resolution agencies is an important step in helping to ensure laws, codes and regulatory frameworks that support fair conduct and a healthy business environment mean something and that egregious and systemic breaches will at least be investigated,” he said.

Any mechanism should be 'fit for purpose, measured, and considered in the manner in which it is used'

However, Peter White, the managing director of the Finance Brokers Association of Australia (FBAA), told The Adviser that he has some reservations around how consumer advocacy groups will be able to make complaints to the ACCC.

While he said the association was supportive of “the principle” of giving advocacy groups the ability to lodge “systemic” consumer law issues to ensure consumers and small businesses are “not being taken advantage of in a systemic manner”, he suggested that the devil would be in the detail.

The FBAA head flagged that consumer advocacy groups have, in the past, launched “unfounded attacks on the broking sector” and said that the “yet-to-be-proposed mechanism for reaching into the ACCC must therefore be fit for purpose, measured, and considered in the manner in which it is used”.

Mr White continued: “And, it should be done by subject matter and practically experienced experts and not cavalier campaigners looking for a cause that doesn’t exist.”

According to the association head, the new proposal will therefore need to be very clear on how “systemic issues” are defined.

“This will be a critical disclosure and will need to be very descriptive by the minister and legislative writers to ensure the mark is not overstepped,” he said.

“As the framework for this is yet to be designed, we look forward to engaging with [Assistant Minister for Competition, Charities, and Treasury], Dr Andrew Leigh MP and his team on this undertaking over the coming months, as it needs to be clear as to how and why this will be considered to be used.”

He told The Adviser that he will be working closely with the UK governor of the International Mortgage Brokers Federation (IMBF) — of which Mr White is chair of the global board of governors — to “fully explore and understand the experiences, outcomes and issues [the ‘super complaints scheme’] faces in the UK, which this is being modelled (in part) on”.

Mr White said he hoped this would mean Australia was on the front foot and does not “fall into any unexpected contentions”.

'Ensuring brokers can provide their services with confidence'

Speaking to The Adviser, the chief executive officer of the Mortgage & Finance Association of Australia (MFAA), Anja Pannek, flagged that consumers are afforded significant protections when they seek the services of mortgage and finance brokers, including Internal Dispute Resolution and External Dispute Resolution, as well as protection under the NCCP and the unrivalled Best Interests Duty.

"We support and welcome steps to further enhance these consumer protections based on data, feedback and insights from the industry," she said.

“We will seek from Minister Leigh to better understand groups eligible to lodge official complaints under this proposal – this has yet to be defined," Ms Pannek continued, adding that she expects the body would be consulted on how the process would operate.

Ms Pannek noted that the MFAA already has "open dialogue with both the ACCC and AFCA as consumer protection organisations".

"We have line-of-sight to broker-related complaints matters, and understand emerging risks through feedback from our members. This means we are well placed to not only consult on these proposed changes but also to provide ongoing insights.

“Our industry predominantly consists of small businesses, bringing competition and choice to the market. Much of our advocacy is about ensuring our members can continue to provide their services to consumers as small business owners with confidence.

“Through our open dialogue with the ACCC, we are also in a position to raise issues we consider affect competition and choice for consumers. This isn’t new – we’ve participated in applications and inquiries before the ACCC such as the 2020 Home Loan Price Inquiry which focused on home loan pricing and impediments to customers wanting to switch lenders," she concluded.

[Related: Consumer advocacy groups to be able to complain to ACCC]