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Consumers can lodge claims with the CSLR from 2 April, the Treasurer’s office has announced, offering victims of financial misconduct up to $150,000 in compensation.
The Compensation Scheme of Last Resort (CSLR) will be receiving claims from consumers from 2 April, as the complaints scheme officially kicks off.
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The CSLR has been introduced with the intent of providing compensation to victims of financial misconduct.
The CSLR will support consumers who have an Australian Financial Complaints Authority (AFCA) determination in their favour and have not been compensated as per AFCA’s decision. For example, this could be because the company has gone insolvent.
It facilitates the payment of up to $150,000 in compensation and covers five financial products and services, including personal advice on relevant financial products to retail clients, credit intermediation, securities dealing, credit provision, and insurance product distribution.
The scheme’s implementation is the last of the banking royal commission’s recommendations.
According to the Assistant Treasurer and Minister For Financial Services Stephen Jones MP, the CSLR can provide eligible consumers with compensation of up to $150,000.
To ensure that the CSLR’s intent is achieved, the minister stated that amendments will be made to the CSLR’s legislation “in due course” to give consumers clarity about the extent of the CSLR’s scope.
“As an interim step” the government announced that, where possible, claims would only progress to the CSLR if the financial services provider under investigation was licensed to provide the relevant product or service.
The minister’s office said that amendments have been made to AFCA’s authorisation, and the AFCA’s rules, to accommodate the interim changes.
Chair of the CSLR’s board has been appointed
The Albanese government has also now appointed Jo-Anne Bloch as the inaugural independent chair of the board of CSLR, where she will serve for an initial three-year period.
Ms Bloch has previous experience in financial services leadership roles, particularly in financial advice, serving as chair of several advisory boards such as Novigi, Financy, and Striver.
She also serves as a non-executive director on the Sydney Financial Forum.
Mr Jones commented on Ms Bloch’s appointment, stating: “Ms Bloch is an experienced leader in financial services, and in particular financial advice, with extensive experience in engaging government and in the not‑for‑profit sector, and is well‑equipped to guide the scheme at its inception and beyond.
“The Government congratulates Ms Bloch on her appointment to the Board of CSLR Limited.”
The CSLR put out a statement welcoming Ms Bloch as the inaugural chair, marking the completion of the CSLR board.
The statement read: “Ms Bloch is an accomplished leader with well-rounded experience and is an invaluable addition to our three-person board.”
She will join Delia Rickard and Kevin O’Sullivan, who have recently been appointed as board members, and David Berry, the chief executive of CSLR.
[Related: MFAA calls for a review of the CSLR within 3 years]
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