The banking royal commission has revealed it already has evidence of homeowners and car owners being ripped off by lenders, signalling the finance sector faces a bruising yearlong inquiry into its treatment of Australian customers.

On the first day of hearings yesterday, the counsel assisting the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Rowena Orr, said of the more than 380 submissions made so far by the general public there were cases of the law being broken and community expectations not being met.

The inquiry, called by Prime Minister Malcolm Turnbull late last year in the face of an embarrassing backbench revolt, has been given until February next year to examine the entire financial system including banks, superannuation funds and financial advisers.

Ms Orr said the first full day of evidence, to be heard next month, would look at issues in the personal lending area where many Australians had complained about mortgages, car loans and credit cards.

She said issues of inappropriate and unsuitable lending, the falsification of documents and the redress for customers had all been raised.

In some cases, customers had loans much bigger than they had sought from their lender.

“The commission will hear evidence of events involving certain financial services entities in the context of home lending that suggest that consumers have not always enjoyed the right to be treated honestly and fairly when it comes to home loans,” Ms Orr said.

“Some of these events may have involved breaches of the law while others may have involved departures from community standards and expectations.”

Of the 385 complaints to have been made so far to the $75 million royal commission, 85 per cent have related to the banking sector.

Misconduct, the cultural and governance structures of banks plus redress schemes for upset customers have all come in for complaint. Ms Orr said many people were fed up with internal redress systems.

“We have seen a large number of submissions that express frustration and concern about the time taken and effort required to navigate the internal and external dispute resolution frameworks that apply to financial services entities,” she said.

The commission will, apart from taking evidence from the general public, will publish its own research papers into the finance sector. The first of those papers shows that Australian banks are among the most profitable in the world.

The profit margins of the big four banks, at 36.4 per cent, were much higher than the rest of the banking sector within Australia.