An Aboriginal woman says its final report was not critical enough of systematic rorts in the financial sector.
Tracey Walsh believes she was misled into paying more than $10,000 in funeral insurance premiums for a plan that would pay out a maximum of $8000 in the event of her death.
Her insurer – the Aboriginal Community Benefit Fund – is privately owned by non-Indigenous people.
She incorrectly believed the product was a funeral savings plan and was horrified to discover she would lose her benefits if she missed any payments.
“I felt like I was over a barrel,” Ms Walsh told NITV News.
The royal commission showed that funeral insurers on average pay out only about one third of the premiums collected.
Indigenous consumers are disproportionately affected – and in some cases have been deliberately targeted by deceptive marketing – because of the cultural significance of “sorry business”.
During the investigation, commissioner Ken Hayne said the evidence pointed to "predatory behaviour" by insurers and salespeople.
“People haven’t been told the truth about their policies,” Ms Walsh said.
“This mob should have been named and shamed. It’s been going on for years and years and years.
“It’s just thousands and thousands of dollars of Indigenous people’s money.”
In the wake of the report, the federal coalition government has said it will act on all 76 recommendations made by the royal commission – which includes redefining funeral insurance as a financial product.
Tracey Walsh emotionally criticised an insurer during the banking royal commission. Source: AAP
Greens Senator Rachel Siewert said the issue was “just one example of the financial targeting” of Aboriginal communities.
“The Government must also act to address the barriers many First Nations peoples face in using banking and financial services,” she said.
Gerard Brody, the CEO of the Consumer Action Law Centre, said there were “too many” loopholes in consumer protection laws.
“The harm uncovered over the last year by the royal commission vividly demonstrates why law reform is required,” he said.
“Extending these important new laws to credit and other financial products means there will be no loopholes — ASIC will now have the power to act where financial products are designed to harm consumers.”
Ian Hamm, chair of the First Nations Foundation, said the royal commission “failed” because it neglected to investigate the fundamental cause of Indigenous people facing financial exclusion.
“My real concern is that it’s missed a golden opportunity to reset the relationship between Aboriginal Australia and the financial sector,” he told NITV News.
“The royal commission itself really highlighted examples of poor behavior by individuals and by some of the corporates.
“What it didn’t do was really look at, ‘Is there a systemic way that the financial sector can support Aboriginal Australians integrate better into the economy [and] have access to financial services in a much more fair and equitable way?'”
Mark Holden, an Aboriginal solicitor at the Financial Rights Legal Centre, said it was good that the royal commission would reign in misconduct.
Josh Frydenberg promised action on all recommendations from the banking royal commission's report. Source: AAP
He recommended that anyone who believed they had been misled about “dodgy” financial products should immediately seek legal advice.
The centre runs ’Mob Strong, Debt Help’ – a free advice service for Aboriginal and Torres Strait Islander people across Australia.
“We will be further engaging with the Indigenous community to help them understand what the banking royal commissions means for them and what they can do help themselves and raise issues with their own leaders MPs,” he said.
Opposition Leader Bill Shorten said senior bank executives should consider quitting and parliament should spend two extra weeks making changes to banking laws.
"They've got to make sure that the people who have been running these banks face the full consequences of their civil and potentially criminal mistakes," he told reporters.
Treasurer Josh Frydenberg said it was time to move forward.
"I think everybody has been surprised by some of the things that they've heard through the royal commission, but the important thing is to look forward to the future," he told Seven's Sunrise.
