Business (Australia) Banks are exploiting loyal customers, warns Productivity Commission Draft report says competition at ‘less than desirable’ levels in market for home loans, credit cards and home insurance The Productivity Commission’s draft report says Australia’s big four banks had ‘substantial market power’, allowing them to ‘pass on cost increases and set prices’. The Productivity Commission said the move was “completely unsurprising” but smaller banks could not win over dissatisfied customers because the new lending benchmark applied to them. The Productivity Commission said that the cost to taxpayers was up to $500m. The report said that barriers to switching financial institutions, particularly for home loans, made “loyal customers ripe for exploitation”. The Productivity Commission said that “no agency is tasked with overseeing and promoting competition in the financial system” and regulation had persistently favoured stability over competition.

Source: The Guardian February 06, 2018 16:52 UTC