In her opening address on Monday afternoon, senior counsel assisting the commission Ms Rowena Orr QC said Aboriginal and Torres Strait Islander people living in remote areas are vulnerable to financial exclusion.
Ms Orr said a lack of bank branches in remote areas mean citizens often end up paying high transaction costs to access funds, most commonly from ATM’s.
While the internet provides an alternative way of accessing financial services, Ms Orr acknowledged many remote communities have little or no access to the internet, leaving them without any reasonable financial services.
"As a result of being excluded from mainstream credit options, consumers may have few alternatives other than to turn to high-cost, small amount lenders,” Ms Orr said.
Ms Orr said these issues, along with predatory lending, superannuation and funeral insurance, will be discussed over the next few days in Darwin.
Funeral insurance under scrutiny
Funeral insurance will come under the microscope during the inquiry, a product that has long concerned regulators and consumer advocates.
Consumer advocates say some insurers have exploited the importance of funeral ceremonies in Aboriginal culture to sell unsuitable funeral insurance plans.
The targeting of often vulnerable individuals and their families, including children, has caused outrage and frustration. Some Indigenous Australians have reportedly been paying for four or five funeral insurance policies for their families.
The investigation is considered long overdue, with 2015 by company watchdog Australian Securities and Investments Commission (ASIC) revealing thousands of children were being signed up to insurance schemes. These could cost $100,000 over a lifetime, just for a funeral.
The report also said of all Aboriginal policy holders, 50 per cent were under 20 years old, and a third were under 15 years old.
One company under scrutiny during the commission will be the private Gold Coast business Aboriginal Community Benefit Fund (ACBF). It is the biggest funeral insurance company catering for Indigenous Australians.
Sydney-based Select AFSL, which sells products including funeral cover, is also set to appear.
The commission will continue tomorrow with testimonies from ASIC and Financial Counselling Australia.
