The ASIC proposal to streamline electronic disclosures laws in financial services does not go far enough, argues a financial services lawyer.
The Fold Legal managing director Claire Wivell Plater suggested clarity is needed regarding online disclosures but a recent proposal by ASIC does not account for the wide range of communication options available or the immediacy of online transactions.
According to a statement from The Fold Legal, ASIC’s new regime would allow financial services or credit providers to send clients disclosure documents via contact details provided for the purpose of receiving disclosures.
However, Ms Wivell Plater said her firm has made a submission to ASIC – on behalf of a fintech client – suggesting the new arrangements have “subtle but tricky restrictions”.
“It is odd that a provider needs to be satisfied that an address has been provided for the purpose of receiving disclosures,” she said.
Ms Wivell Plater argued many clients now communicate via social media profiles, meaning ASIC should also allow disclosures via this medium.
“The power remains with the user to choose whether to use their social media profile to register,” she said.
In addition, she suggested the ASIC proposal may slow down communications for online businesses by requiring them to send an email or SMS with the documentation.
“It’s not exactly timely. The consumer is already online and ready to transact,” she said.
“Requiring the disclosure to be provided by a different medium to the one they have chosen to interact with surely increases the risk that they won’t access it before proceeding.”
As an alternative, she suggested ASIC should allow online businesses to provide disclosures via a ‘pop-up’ window on their website.
“They’re timely and, if further assurance is needed that the consumer has received the disclosure, for example because it’s particularly significant or contains individual information like an SoA, the consumer can be asked to signify receipt by a well-placed checkbox,” she said.
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