Finance and mortgage brokers should be aware that the government’s new Compensation Scheme of Last Resort (CSLR) was rolled out in early April and understand the details around the scheme, according to the Finance Brokers Association of Australia’s managing director Peter White AM.

Mr White said while there has been little fanfare around its commencement, brokers as well as lenders and others across several financial sectors are being charged a new annual levy to fund it.

“CSLR is funded by industry, and it means that there is now an avenue for a consumer to make a claim of up to $150,000 if it determined that someone in the financial services sector, including a finance broker, has engaged in misconduct.”

He said there are a number of eligibility requirements and if a broker had a complaint, their professional indemnity insurance company should still be the first party notified.

“Just as the scheme is named, this is only claimable as a last resort, which means when PI insurance won’t pay,” he explained.

The CSLR was established after a recommendation by the Ramsay Review and support by the Financial Services Royal Commission.

The Ramsey Review said the scheme would “promote trust and confidence in the EDR framework and the financial services sectors more broadly”, and it has been set up as an independent, not for profit company.  

Mr White pointed brokers to view a new website established to explain the scheme for more information – https://cslr.org.au