Australia to adopt UK's "key facts" document

This was one of the key recommendations released today by the federal inquiry into competition in the banking and non-banking sector undertaken by the House Economics Committee.

Craig Thomson, MP and chair of the committee told delegates at the Australian Securitisation Conference in Sydney that it recommended to Treasury that it develop a "standardised key facts document for mortgage products based on UK model to help consumers compare financial products".

"The standardised key facts document must be provided to the committee for review within 12 months," Thomson said.

In putting together this recommendation, Thomson said consumers must have access to "accurate, comprehensive and freely available information if they are able to compare banking products and ultimately choose one most suitable to their needs and which they can afford over a long time"

Thomson said the UK had addressed the problem of documentation and consumer ability to compare products by producing 'key fact documents', which "clearly outline features, benefits and costs of loan"

"Neither consumers nor financial institutions are well served by very conservative and legalistic disclosures that consumers are provided with," he said.

MFAA CEO Phil Naylor supported the recommendation: "The push for a standard document covering the key facts of mortgage products would help consumers better understand and compare the differences between mortgages available to them."