The Federal Government should be supporting a last resort compensation scheme rather seeking to provide ever-higher levels of funding to the financial services regulators, according to the Victims of Financial Fraud (VOFF).
In an open letter to the Treasurer, Josh Frydenberg the VOFF has pointed to the high levels of funding directed towards the regulators but noted that the newly-formed Australian Financial Complaints Authority (AFCA) is unable to assist financial consumers who are harmed by regulatory weaknesses.
“Victims of regulatory failure have no legal recourse or remedy,” the letter said. “The unique circumstances surrounding the Trio fraud caught both regulators and government agencies off-guard, the entire financial system failed.”
The letter said the extra funding being made available by the Government represented an opportunity for the Coalition to support a last resort compensation scheme.
“The victims deserve some form of assistance,” it said. “They don’t have deep pockets for a civil court option.”
“The Coalition Government’s boost in funding to the regulators is vindication to VOFF that the financial system failed consumers,” the letter said.