legislation financial services background checks

Market Updates, Trends, Best Practice – 2019 into 2020

Overriding trend for 2019 was: Legislation Changes

Legislation changes and regulator movement with new guidelines and standards came in thick and fast in 2019, catching up on the findings and fallout of the Royal Commission into the banking, superannuation and financial services industry.

Members of the financial services industry are working hard to change their culture, conduct, processes, with the focus moving towards the needs of the customer. These movements did have a flow-on effect on the background checking industry.

The regulators are changing too

The Australian Prudential Regulation Authority (APRA) that retains responsibility for prudential regulation, and the Australian Securities and Investment Commission (ASIC) which primarily regulates conduct and disclosure, will now be reviewed regularly. These regulators have already started making changes in line with recommendations from the royal commission and are the instigators of most policy changes; for example, we felt the impact of APRA tightening cloud-based services late in 2018.

In July 2019, APRA also released a new Prudential Standard CPS234 on Information Security to ensure that APRA-regulated entities have adequate security measures in place; requirements which are also extended to include information assets that are managed by third parties (including outsourced services such as HR and background checking).  It has never been more important for organisations to have robust information security policies and transparency around compliance with regulatory requirements.

With all this movement in the financial services industry, the background checking basics for financial services have been given a new lease of life, with renewed interest in checks such as ASIC’s Business Reference for financial advisors.

APEC Cross Border Privacy Rules – Australia’s participation

In November 2018, Australia became a participating member of the Asia-Pacific Economic Cooperation (APEC) Cross Border Privacy Rules (CBPR) System which provides a single framework for the exchange of information and cross border privacy protections. The APEC CBPR System connects differing national laws on privacy and data protection within the APEC region. At present, there are eight participating countries: US, Mexico, Japan, Canada, Singapore, the Republic of Korea, Australia and Chinese Taipei, with more expected to join.

It was announced by the Australian Government’s Attorney-General Department following the confirmation of Australia’s participation, that they would work closely with Australia’s privacy regulator Office of the Australian Information Commissioner (OAIC) and businesses in 2019 to implement the CBPR system requirements; however, we are yet to see momentum on this. We will keep you posted on any developments.

Consumer Data Rights and Open Banking

1 August 2019

The Australian Consumer Data Rights Bill 2019 [Treasury Laws Amendment (Consumer Data Right) Bill 2019] passed through Parliament on 1 August 2019, and will roll out in stages across specified sectors – the first being the banking sector, also known as “Open Banking” and this is already in motion. Open Banking came out of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that concluded in February 2019. Next on the hit list for the Consumer Data Rights is the energy and telecommunication sectors, and then it will be introduced sector by sector across the broader economy.

The Consumer Data Right aims to provide greater choice and control for Australian consumers over how their data is used and disclosed.

Whist this doesn’t impact on the background checking industry specifically; we have noticed an increase in candidate access to personal information requests, which we predicted would increase as candidates gain a deeper understanding into general data access rights. We have a dedicated Privacy Officer to assist candidates with these requests.

Modern Slavery – Modern Slavery Act 2018 (Cth)

Commenced: 1 January 2019

Modern slavery, human trafficking, forced labour, child labour, and slavery-like practices are not typically associated with the likes of developed countries such as Australia. However, modern slavery is important when considering global supply chains.  The International Labour Organisation has estimated that there are over 40 million people trapped in slave-like conditions.

Who must comply with the requirements in the Modern Slavery Act?

Factors for whether an organisation needs to comply/report vary, and organisations have approached these new requirements in different ways. We have noticed increased scrutiny in supply chain for background checking and HR/recruitment functions in general as compliance with this Act comes into play in internal policy and procedure.

Change in Discrimination Act wording

Amended: 1 October 2019

The previous regulations prohibited employers from discriminating on the basis of any criminal record, unless the criminal record related to the ‘inherent requirements’ of a position.

Under the new regulations, discrimination includes any distinction on the basis of an ‘irrelevant criminal record’. Accordingly, under Commonwealth legislation, employers may lawfully exclude job applicants on the basis of a ‘relevant criminal record’.

Aged Care Royal Commission

Final report due: November 2020

The inquiry into aged care sector investigated aged-care housing, in-home care and care for young people with disabilities living in a residential aged-care environment is ongoing. An interim report was delivered in October 2019, with a final report expected in November of this year.

The Federal Government has vowed to spend more than half a billion dollars within the aged care sector as a result of the interim report. The Royal Commission described the findings as a “shocking tale of neglect” and identified three key areas for immediate action:

  • More funding for homecare packages to cut waiting list times;
  • Reducing the reliance on chemical restraints (which is the use of medication to subdue and control the behaviour of aged care residents) by spending money on quality medication management programs; and
  • Money injected into meeting new targets to stop young people with disabilities being placed into aged care facilities.

Although the above is a way forward, the report stated that the system clearly failed to meet the needs of elderly people, often neglecting them and described overall treatment as “unkind and uncaring”. ABC reported that the Commission found service shortfalls, serious substandard and unsafe and “underpaid, undervalued and insufficiently trained” staffing.

Case Study of 2019 – Women jailed for lying on her CV

The most talked about case study for 2019 would have to be about Veronica Hilda Theriault. Employed as Chief Information Officer within the Department of Premier and Cabinet (DPC) which attracted a $270,000 per annum salary.

Charged with deception, dishonestly dealing with documents and abuse of public office in September 2017.

Sentenced to 25 months in jail with a non-parole period of 12 months. Judge Boylan said he took into account Theriault’s mental health struggles, including her bipolar disorder.

A CV that showcased a fabricated education and work history, with false referees listed.

Judge Boylan said “You arranged that your brother would supply a reference to the department in which he said he worked for you when you were employed at Wotif. That reference contained false information — neither you nor your brother had ever worked at Wotif.”

Theriault further organised for her brother, Alan Hugh Melville Corkill, to be awarded a Government contract that allowed him to earn $21,000. (Corkhill received a suspended sentence for his role in the fraud.)

Further conduct that was included in sentencing, but not the charges, included: Supplying a false payslip from previous employment to gain a higher salary; and providing a fake ‘fit to work’ letter, which Theriault wrote herself, not her treating doctor.

Coming up in 2020
  • Whistleblower Law – The new whistleblower protection laws bring significant changes to the existing whistleblower protection framework. The new regime requires that “public” (including not-for-profits) and “large proprietary” companies must have a compliant whistleblower policy in place. The importance of whistleblowers in the war against white-collar crime can be seen in this case-study.
  • Product – The growing need for flexibility as organisations look at what they are really trying to achieve in background checks not just ticking a box – we expect to see the increase in customised products continue into 2020.
  • Adapt to change – With the devastation of this summer’s bushfires, the idea of moving Australia’s summer holidays to March or April has emerged. Sounds ridiculous until you think about how most of the Australian population pack their camping gear and head straight into the bush at peak bushfire season.
  • Coronavirus Fallout – what will happen next? Health, economy, interest rates, social distance, working from home, cancellations and toilet paper – the one thing we can be certain of is that we are in the middle of uncertainty.


The information contained in this post is the opinion of PeopleCheck and does not form the basis of legal advice.





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