Businesses are continuing to take advantage of poor financial literacy levels among Indigenous customers, a parliamentary committee has warned.
An interim report handed down by parliament’s Indigenous affairs committee on how companies engage with Aboriginal and Torres Strait Islander consumers found despite high-profile cases, bad corporate behaviour was still carried out by financial and telecommunication services.
While the committee has not yet made any formal recommendations, members said financial counselling services in remote communities should be better resourced.
“The work of financial counsellors is vital to ensure that individuals, especially in remote communities, can be supported and assisted to stop financial and emotional trauma,” the interim report released on Tuesday said.
“Within the finance sector, the operation of payday lenders and certain car loan finance operations were deeply concerning to the committee.”
It comes after Telstra was fined $50 million for exploiting Indigenous customers in 2021, after the telco giant signed up more than 100 people to contracts they did not understand or could afford.
Despite the large fine by the Australian consumer watchdog, the committee said “unconscionable” sales practices were still taking place towards Indigenous customers.
“Evidence presented also indicated that many Aboriginal and Torres Strait Islander people around the country experience financial difficulties as a result of telecommunications debt,” the report said.
“The upselling of products that were not needed was cited as one component of this. The behaviour of corporate bodies in opposition to community expectations must be addressed.”
The report also addressed reconciliation action plans run by Reconciliation Australia.
The action plans allow for organisations to integrate the principles of reconciliation into their businesses.
While more than 1000 businesses have signed on to the action plans since they were launched in 2006, the committee said it had to be more than just a “box-ticking exercise” for companies.
The committee said even organisations that had signed up to a plan, such as Rio Tinto, had carried out actions contrary to reconciliation, such as the destruction of Juukan Gorge.
“A reconciliation action plan document is therefore not enough in itself. A reconciliation action plan has to become, and remain, an integral part of the practices of the business at all levels,” the report said.
The committee has not handed down a full report or made formal recommendations due to the short amount of time it was given before the end of the current parliamentary term, along with COVID-19 travel restrictions.