Digital disclosure cuts red tape

In an attempt to cut the virtual red tape, ASIC has made it easier for businesses to provide product disclosures to consumers through digital channels.

The industry regulator has responded to calls to remove unwanted barriers, with financial services able to send product disclosures to a customer’s email address as the default option, unless the consumer opts out.

ASIC Commissioner John Price says these measures remove barriers between business and consumer needs.

“The measures announced today respond to changing consumer preferences, with ever increasing numbers of people transacting digitally. Almost 15 million Australians now have a home internet connection and 68% of those online are using three or more devices to access the internet,” he says.

“The changes mean product disclosure statements (PDS) and other financial services disclosure documents will be delivered to consumers digitally as the default option, unless the consumer opts out.”

Last month, the Insurance Council of Australia (ICA) announced that a taskforce would be assembled to help clear up confusion for consumers around product disclosure.

While the ICA welcomes the changes, ICA General Manager Communications and Media Relations Campbell Fuller says the changes don’t directly benefit the general insurance sector.

“The Insurance Council of Australia (ICA) welcomes ASIC’s effort to improve disclosure measures for consumers,” he says.

“However, this announcement does not deliver substantive benefits for the general insurance sector because the relief provided is confined to disclosure requirements in the Corporations Act while insurance Product Disclosure Statements include information required by both the Corporations Act and the Insurance Contracts Act.

“The general insurance industry, governments and consumer groups all perceive the current disclosure regimen as being lengthy, often complex and not always helpful in ensuring consumers understand the product they are buying.”