Australia's Choice, The self-proclaimed "people's watchdog" on Thursday called for a new interventionist mechanism to be established so that "designated" advocacy groups can prompt regulators to respond to what it calls "super complaints" within 90 days.
The broadside at banks, card schemes and regulators, including the Reserve Bank of Australia and the Australian Payments Clearing Association, is contained in Choice's 44-page submission to the Senate inquiry into competition in the banking sector.
"There has been no intervention when consumers have suffered from massive technical failures in the banking system," Choice said.
"[These include] the loss and deletion of transaction histories by [the National Australia Bank] in 2010 or the widespread delay in mortgage settlements among the big four banks in 2008 and 2009."
The group said the present system of getting consumers to file specific complaints or litigating "will not achieve sector-wide improvements".
The call for new policing powers for consumer groups is based on legislation that is already in force in Britain.
Choice said that in Britain chosen advocates can access a fast-track system to notify regulators of "market features that appear to be significantly harming the interests of consumers".
The lobby group has also demanded that the number of complaints against banks be regularly published, including the naming of institutions and how many complaints were made against them - as the Telecommunications Industry Ombudsman now does in that sector.
A justification for Choice's call for greater intervention is the claim that there are no mechanisms to monitor and "address systemic customer concerns" and improve service.
Banks immediately dismissed Choice's demands for a regulatory overhaul as unnecessary.
The Australian Bankers Association chief executive, Steven Münchenberg, said the document was "largely a list of actions already undertaken or currently under review".
He said the Australian Securities and Investments Commission already possesses "extensive powers to address regulatory concerns which are of a systemic nature in financial services".
He said the Financial Ombudsman Service also already collected and published statistics on systemic issues.
The chief executive of the Australian Payments and Clearing Association, Chris Hamilton, echoed the ABA's concerns and said it would be better to wait to find out what the reviews under way recommended.
The stinging report from Choice was not confined to punitive measures against the financial services industry. In a section dedicated to the internet's impact on financial services, Choice warned that banks that failed to keep up with technology would be challenged by new intermediaries harnessing social media like Facebook.
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