Protection of Financial Consumers in Australia

by Dr. Andy Schmulow

Financial consumers are defined by s 12BC of the ASIC Act1 as consumers of services worth less than AUD 40,000.00,2 or if worth more, then ‘of a kind ordinarily acquired for personal, domestic or household use or consumption’;3 or if the services are for use or consumption in connection with a small business,4 and cost more than AUD 40,000.00, ordinarily acquired for business use or consumption.5

Australia’s population is approximately 24 million,6 with a median age of 37.4 years.7 The average net worth for all Australian households in 2013–14 was $809,900.8 In real terms, average equivalised disposable household income was AUD 998 per week in 2013–14.9 Over 70 per cent of households had debt of some level in 2013–14.10 Twenty-six per cent of such households were servicing a total debt that was three or more times their annualised disposable income.11 Of 8.8 million households in 2014,12 almost 36 per cent had a mortgage over their primary residence.13