Lead generation a 'conveyor belt of harm': Longo

Departing ASIC chair Joe Longo said the most effective way to tackle unscrupulous actors in lead generation activity would be to stop it at the source and ban all unlicensed communications.

Speaking at the Financial Counselling Australia conference, Longo said the regulator must disrupt the lead generation model that has enabled the "conveyer belt of consumer harm".

Lead generation activities have been in the purview of the regulator after the collapse of Shield and First Guardian. Many victims transferred their superannuation savings into the risky investments after a call from a lead generator or after clicking on a social media advertisement urging them to do a 'super health check'.

"We have witnessed unscrupulous actors trying to exploit the significant pot of money in our superannuation system through what we suspect is industrial-scale misconduct," Longo said.

"Everyday Australians who signed up for a free super check have instead lost their life savings."

Longo strongly backed Treasury's ongoing consultation on lead generator and superannuation switching activities.

The government wants feedback on prescribing certain lead generation activities as a type of financial service, where those activities influence consumer decision making in relation to financial products or services.

Furthermore, changes to capture lead generators under the conflicted remuneration ban is also up for consideration.

"We wouldn't let someone perform heart surgery just because they've watched a lot of E.R. - therefore we shouldn't let people who aren't qualified lure Australians into losing their life savings and turn a profit from it," Longo said.

"After all, super is one of the biggest assets many of us accumulate in our lifetimes - the people talking about it should be appropriately qualified."

Cbus chief executive Kristian Fok welcomed Longo's call and said business models that combine high-pressure sales tactics and the AI-powered targeting of members on social media which cannot be effectively regulated should be banned outright.

"We are calling for an outright ban on these tactics to protect members hard earned savings," Fok said.

"As long as there are gaps in the system, Australians' retirement savings will be at risk from unscrupulous operators."

Longo also highlighted it is important for ASIC to remain transparent on the choices it makes and why it makes them.

"I never want the public to lose confidence in ASIC again in the same way it did after the Royal Commission," Longo said.

"And maintaining confidence means telling people what you're going to do and following through on it."