The Australian Securities and Investments Commission (ASIC) is intensifying its enforcement efforts in the superannuation sector, aiming for decisive actions against misconduct in the coming months and extending into 2024.
ASIC’s focus was underscored in the latest enforcement and regulatory update, which highlighted its dedication to consumer protection in the third quarter of the year.
This included calling on banks to prioritise better consumer outcomes and initiating civil penalty proceedings against Westpac for alleged negligence in responding to financial hardship notices.
Enforcing fairness
“The July to September quarter saw ASIC achieve strong results in court and file significant matters that go toward our ongoing work to protect consumers,” ASIC chair Joe Longo said.
“Our focus on the best interests of members in the superannuation sector is part of our continuing work to make the financial system fair for all Australians.”
During the quarter, ASIC took action against AustralianSuper, accusing them of failing to consolidate multiple member accounts.
The regulator alleged that for nearly a decade, AustralianSuper did not implement adequate measures to identify and merge duplicated accounts, leading to excessive fees and insurance premiums for affected members.
It said the failure to merge duplicated accounts across the industry was “problematic”, signalling ASIC's intent to address similar cases in member services.
Strong Q3 performance
“Acting against misconduct to maintain trust and integrity in the financial system is a key priority for ASIC,” the regulator said.
“It drives and facilitates change in good consumer and investor behaviours, and ensures a strong and robust financial system.
“ASIC’s enforcement performance remained strong in the third quarter of 2023. We continued to deliver against our 2023 enforcement priorities, with a strong focus on greenwashing, insurance sector failures, the protection of vulnerable consumers, and poor design, pricing and distribution of financial products.”
More enforcement actions
At the same time, ASIC filed its second and third cases relating to greenwashing, targeting Active Super and Vanguard for alleged misleading statements.
Additionally, the Federal Court finalised ASIC's action against ANZ, imposing a $15 million penalty for misleading customers about available funds in certain credit card accounts.
Further, National Australia Bank (NAB) was slapped with a $2.1 million penalty following a Federal Court ruling on its engagement in unconscionable conduct regarding account fees.
The third quarter also saw ASIC taking enforcement actions against the crypto exchange Bit Trade and the online investment platform eToro.
Shrinking savings
A recent research conducted by Finder, a financial comparison site, showed that nearly one in four Australians, or 23% of those surveyed, do not think that they will have enough in their superannuation to fund their retirement.
“That's a potential 4.6 million people without enough to get by once they finish working,” Finder said.
“Even more disturbingly, 27% of Australians don't know if their super will be adequate or not.”
The average Australian believes $641,223 is sufficient to retire comfortably but the average male aged 60-64 has just $402,838 in their super and women even lower, at $318,203.
"We know cost-of-living pressures are making life difficult for many Australians," ASIC's Longo said.
"Protecting consumers experiencing financial hardship has been a particular focus for ASIC this quarter in our enforcement and regulatory actions."