Jones announces ‘victory’ for victims of financial misconduct as CSLR passes Senate

In a statement on Thursday, Financial Services Minister Stephen Jones confirmed that the Senate has passed the Compensation Scheme of Last Resort (CSLR), marking the implementation of one of the last outstanding recommendations from the Hayne Royal Commission.

“This is a significant victory for over 2,000 people who have been waiting for a resolution on their cases,” said Mr Jones.

The CSLR is meant to facilitate compensation of up to $150,000 to consumers who have an unpaid determination from the Australian Financial Complaints Authority relating to personal financial advice, credit intermediation, securities dealing and/or credit provision.

“To ensure the CSLR can commence as soon as possible, the government will fund the costs to establish the body that will operate the CSLR, including funding the costs of the first levy period through to the end of the 2023–24 financial year. The scheme will then be funded by industry for future years,” the minister said.

He confirmed that consumers will be able to lodge claims for compensation from April 2024, with the first compensation payments to follow shortly thereafter.

“The Albanese government is committed to strong consumer protections in the financial sector. The successful implementation of the CSLR will further strengthen consumer trust and confidence in Australia’s financial system,” the minister said.

Citing “nine years of Coalition neglect”, the minister added that “Australians finally have a government that puts them first, and the establishment of the CSLR is just one example”.

Earlier this year, Mr Jones disclosed there are approximately 2,000 cases on hold with the Australian Financial Complaints Authority awaiting passage of the CSLR, and that in another 30 cases, compensation has been awarded but can’t be paid until the scheme has been established.

Pushing for its passage in March, he said that “if the CSLR bills are not passed this month, consumers will be waiting until 2024 to receive compensation”.