16th Aug 2017
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CBA releases list of regulatory ‘issues’ – are you a victim?
Author: Ben Hocking
Are you a CBA scandal victim?

The Commonwealth Bank (CBA) has launched a refund program after releasing details of systemic regulatory ‘issues’ costing customers and staff millions of dollars.

The list of issues include selling lines of insurance that wouldn’t have been paid out, over insurance for home loan customers, the underpayment of superannuation to employees and failing to cancel insurance on numerous deceased estates.

The revelations of poor regulatory practices came after the CBA board announced that Chief Executive Ian Narev would retire from his position at the end of the 2018 financial year.

The bank conceded the statement of reviews and remediation processes it detailed was "not an exhaustive list of all regulatory matters" it faced, but gave a brief rundown on where several stood.

These include:

  • A review of superannuation payable to all employees dating back eight years. The review is ongoing and covers 36,000 current and former workers. The total refunds are yet to be determined, but the first $16.7 million tranche of repayments is expected to be made shortly. An average of about $463 plus interest will be paid per employee.
  • Refunds to Credit Card Plus insurance customers who "may not have met the employment criteria, meaning they may not, if the need arose, have been able to receive certain benefits under the policy." In a deal struck with the Australian Securities and Investments Commission (ASIC) the bank will soon start refunding about $10 million, including interest, to 65,000 customers.
  • Refunds to Home Loan Protection insurance customers charged an incorrect premium amount or who had incurred premium charges before the home loan was drawn down. So far, 9600 customers have been identified and $586,000 has been repaid.
  • Charges on disputed card transactions. The bank noted when refunding disputed transactions on customers' cards certain charges were not always correctly adjusted. After reviewing 4.5 million transactions dating back to 2009, refunds totalling $5 million will be made to around 355,000 customers.
  • Deceased estates. "ASIC was notified about an issue affecting some insurance products, where for a number of accounts, a confirmation of the cancellation of an existing insurance policy may not have been sent to the deceased estate," CBA said in a statement. "We are currently undertaking a detailed investigation back to the year 2000 to confirm the number of affected customers and will contact their estates and remediate if appropriate."

ASIC Deputy Chair Peter Kell said it was unacceptable that customers were sold insurance that did not meet their needs.

“One of ASIC's priorities is addressing poor consumer outcomes associated with add-on insurance, including CCI (consumer credit insurance),” Mr Kell said.

“Consumers should not be sold products that provide little or no benefit, and banks should have processes in place that ensure this.”

CBA CEO Mr Narev and other senior executives had their bonuses blocked last week in response to alleged breaches of the anti-money laundering and terrorism financing laws by the bank.

Opinion: What constitutes a sacking offence at CBA?

When news first broke that Mr Narev was resigning, it seemed as though the weight of the accumulated scandals had finally forced the board to take action.

Then the details became apparent and we discovered that he would remain for the better part of a year and that he continued to enjoy the full support of the board.

This begs the question: what exactly constitutes a sacking offence at the bank?

The CBA is Australia’s largest money lender and thanks to a succession of scandals, its brand has been dragged through the mud.

The only time the board saw fit to take any action at all over the scandals, was after the alleged breaches surfaced. Mr Narev’s pay packet was subsequently slashed by more than 50 per cent after losing his bonuses for the financial year.

That still left the bank boss with a total pay packet of $5.5 million last financial year, and one expects the bonuses will be back on the table next year, as well as a hefty golden handshake.

"Nothing has changed — we have full confidence in Ian as CEO," CBA chair Catherine Livingstone told reporters during a briefing to announce Mr Narev’s resignation.

Where is the accountability?

The failure to act sooner over serious regulatory breaches that have stolen millions from customers and staff only heightens the need for a royal commission into the financial services industry, because banks seem incapable of holding their own to account.

What do you think? Should Mr Narev have been sacked for the litany of failures on his watch? Should all the CBA executives lose their jobs? Would you like to see a banking royal commission?

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    COMMENTS

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    outlander
    16th Aug 2017
    10:14am
    Big business and Government, hard to believe we're all Australian ( apparently ) Mr Narev should be stood down..I suspect there's a lot of "hide the mess" going on
    Waiting to retire at 70
    16th Aug 2017
    11:13am
    Could it be that the problem is that Mr Narev is a New Zealander?

    With all due respects to Henry II, and my misquoting of him, but "who can rid me of [these] troublesome [New Zealanders]" or was that Malcolm Turncoat?
    TREBOR
    16th Aug 2017
    2:31pm
    Could be - every goddamned furruner that's brought in here to fix things fixes 'em for good for many, and always at huge cost and massive remuneration.

    This visiting firemen nonsense, like Sol Trujillo etc, has got to stop. I've said it before and I'll say it again - Australia, with a workforce of around twelve million spread over a massive area, does not have the workforce infrastructure to support this style of 'management', which also includes toll roads and all the other Yank rubbish that keeps being dumped on those struggling twelve million.

    Where are all the 'experts' to sit down and work that out?
    floss
    16th Aug 2017
    11:06am
    That is why most things should not be privatised once you go down that track the Australian public and Government loose control of it. Most times it will be controlled by foreign interest and little tax will be paid, and that is the problem that will bring Australia down. And the big question is why doesn't the present Government wake up to this fact.
    Waiting to retire at 70
    16th Aug 2017
    11:30am
    Got to agree; privatisation hasn't thrown up too many successes. And it continues unabated.

    Governments in this country seem to forget their obligation to "serve the people". Clearly they ONLY 'serve the party' today; both LNP & Labor.

    "A plague on both their houses."
    Old Geezer
    16th Aug 2017
    12:06pm
    Best thing they ever did was privatise the CBA.
    GeorgeM
    16th Aug 2017
    1:01pm
    Agree, floss, this is a good case study of how privatisation has failed through the greed of high-paid non-performers delivering poor quality results for customers. Poor quality Chairperson (and Board) appointing poor quality CEO, in turn appointing poor quality Managers unable to deliver quality outcomes - usually selections being based purely on sycophantic loyalty to their masters up the chain to deliver large bonuses. Massive clean-out is needed.
    MICK
    16th Aug 2017
    11:13am
    It is sad that Narev was not sacked IMMEDIATELY. He should have been. Instead an arrogant and defiant Narev promoted himself on the 7:30 Report whilst refusing to answer the damning questions Sales kept asking.
    If you can't fire crooks and have to pay them to leave then the system is crooked. Employees in the same situation would not get that sort of a deal. The top end always does.
    Old Man
    16th Aug 2017
    11:21am
    I wonder if sacking Narev is, in fact, shooting the messenger MICK. Narev was appointed by the Board of the CBA and carried out the policies of the Board. When this matter blew up, as well as the previous investment scandal, the Board pushed Narev out into the public arena whilst they sat back in the shadows. Sure, heads should roll for this latest stuff up but to single out just the employee doing the bidding of his masters doesn't go far enough. If he was a rogue employee ignoring the Board he would have been sacked a long time ago.
    Waiting to retire at 70
    16th Aug 2017
    11:42am
    So "Old Man" are you saying BOTH the Board, including the chairperson and their 'mouth piece' should go? Now there's some progress.

    It seems with Comm Bank we've gazed long enough into an abyss, that the abyss is gazing back us.

    Look how the Comm Bank, its chairperson, its board, its CEO and senior managers continually struggle to maintain control of the message. "Once you give a charlatan power over you, you almost never get it back."
    Old Man
    16th Aug 2017
    12:18pm
    Yes, Waiting to retire at 70, that is exactly what I'm saying although the full Board shouldn't be sacked as there must be a continuity. The ones who are leading such as the Chairperson and alternate Chairperson would be in my sights.
    GeorgeM
    16th Aug 2017
    12:56pm
    Agree, CEO as well as Chairperson, and also all Managers of departments involved in these multiple failings must be sacked IMMEDIATELY.

    The culture in the Bank is clearly to make profits without any consideration to QUALITY of work, and that is created by bad appointments starting from the top and going down the chain - a very wide chain / network at this Bank. A full cleaning-out is essential.
    Troubadour
    16th Aug 2017
    1:28pm
    Employees having done much less or caused such disarray and upset to people would have had
    instant dismissal.
    Again one rule for the rich and another for the
    ordinary people - and Narev was so arrogant about it all with no apologies, and still felt he was the right man for the job.
    I DON'T THINK SO
    All these CEO's are far too highly paid - what great work could be done in the world with half their combined pay checks
    Troubadour
    16th Aug 2017
    1:28pm
    Employees having done much less or caused such disarray and upset to people would have had
    instant dismissal.
    Again one rule for the rich and another for the
    ordinary people - and Narev was so arrogant about it all with no apologies, and still felt he was the right man for the job.
    I DON'T THINK SO
    All these CEO's are far too highly paid - what great work could be done in the world with half their combined pay checks
    fred
    16th Aug 2017
    2:25pm
    Agree entirely with Troubadour ie dismiss Narev andcCut all executive managers and directors pays 50 % or below $1 million annual any thing above is not required, necessary or earned

    The Board and Chairman are responsible for everything , they direct the CEO and sign off on everything just like any other Company , There should also be penal sanctions put in place for fraud and serious breaches of laws They need to be held accountable
    GeorgeM
    16th Aug 2017
    4:53pm
    As Gerry Harvey, a respected and successful Businessman who should know, said a few years ago - no one deserves to be paid a salary of more than $1 Million per year, as nothing they do can justify more than that.

    We need to have a cap on executive salaries - say, no one should be paid more than the Prime Minister, and if they do tax the excess at a marginal rate of 90%. Once the greed issue is resolved,then people just may be hired for their competence.
    MICK
    16th Aug 2017
    8:23pm
    OM: I agree but the captain always has to take responsibility for the ship. The interview with Narev a few days ago was quite disturbing with the guy sitting there with a smirk on his face, not answering questions and promoting himself and saying he is not going anywhere.
    I advocate that Narev and the entire Board is sent packing. No golden parachutes.

    George: Great post and you are absolutely correct. Long suffering shareholders have to stand by and see their companies being milked by their employees who not only get a ridiculously high salary but then free shares, partly paid shares and bonuses. This often brings makes the real salary multiples of the set salary. The trouble with the system is that CEOs and their Boards who control shares they do not own (eg., AMP owns shares in all the major banks) vote on executive salary motions and nearly always approve often large increases because THEY FLOW ON TO THEM eventually. It's a perverse leapfrog game which governments refuse to end. They need to!
    Symo
    16th Aug 2017
    11:13am
    The problem is most of these payments will probably be gouged back from banking customers through increased fees, etc.
    Old Geezer
    16th Aug 2017
    12:08pm
    Of cause losses are just made up some where else.
    Rosret
    16th Aug 2017
    1:12pm
    Whatever happen to Adam Cranston, 30, son of Australian Taxation Office deputy commissioner Michael Cranston, who allegedly set up and ran the $165 million tax fraud syndicate?
    The law is so vague for those at the top end of town. Is the CBA CEO actually responsible for not detecting the laundering of funds or does the public just want to make someone's head roll.
    I would suggest that many people made an oversight and it went legitimately undetected due to a lack of procedure. Does that make a CEO guilty or the bunny?
    TREBOR
    16th Aug 2017
    2:34pm
    The buck stops with him - perhaps it needs to be the buck-shot.
    Pamiea
    16th Aug 2017
    11:51am
    Definitely agree there should be a banking royal commission. The CEO wouldn't have been sacked as I'm sure he would have been advised by the large legal team the bank is going to need as it admits guilt!! Disgusting money these guys earn.
    Old Geezer
    16th Aug 2017
    12:07pm
    Why? To make some lawyers rich?
    GeorgeM
    16th Aug 2017
    1:03pm
    Maybe better still, Pamiea, nationalise the CBA, sack all Management and restructure it with a charter to serve CUSTOMERS!
    Spitfire
    16th Aug 2017
    12:13pm
    Politicians, Bankers, Lawyers,Clergy what else do you expect from these pillars of society. We ordinary folk have all obviously have got it all wrong not following their example!!
    Triss
    16th Aug 2017
    12:43pm
    Politicans and their like seem to sprinkle their speeches with "ordinary Australians" but leaving themselves out because they feel that they're elite and we're uninteresting and commonplace.
    In the wake of all the corruption going on we need to change from 'ordinary Australians' to 'genuine Australians' because the so called elites are the peelings and scraps only fit to be thrown out.
    KSS
    16th Aug 2017
    12:55pm
    Why wouldn't the CBA Board back the CEO and say he had their full support? Mr Narev as the CEO would implement the decisions made by the Board. Clearly he did that well!

    The entire Board should be dismissed if there is also evidence of their complicity.
    Finni
    16th Aug 2017
    1:00pm
    Of course they should be sack and if the cba shareholders and institution that hold shares give another strike against the bank I assum that the board will be spilled
    TREBOR
    16th Aug 2017
    5:25pm
    Those on the board hold the majority of shares...... good luck on a spill...
    Finni
    16th Aug 2017
    1:00pm
    Of course they should be sack and if the cba shareholders and institution that hold shares give another strike against the bank I assum that the board will be spilled
    TREBOR
    16th Aug 2017
    2:28pm
    Narev to retire you say?

    "Good morning ladies and gentlemen, this is your captain speaking... we are experiencing some technical difficulties with our engine systems, and unfortunately will be compelled to make a forced landing but I'm afraid our chances are very limited .. all Top Class passengers are to assemble at the rear of the aircraft immediately - first door at the rear, one golden parachute per passenger......"
    Batara
    16th Aug 2017
    3:35pm
    Regarding Ian Narev and other bank executives, the fact that they hold on to their multimillion dollar jobs beggars belief. I am definitely in favour of a banking royal commission. These blokes treat society with contempt.
    TREBOR
    16th Aug 2017
    5:29pm
    The ordinary worker guilty of such an oversight would be on the street immediately - clear your desk....

    Imagine the plight of an electrician who failed to ensure a circuit was properly protected.....
    Anonymous
    16th Aug 2017
    5:33pm
    what a silly example.
    the electricians negligence could have killed someone
    Batara
    16th Aug 2017
    6:33pm
    Err Raphael old mate. Narev's negligence allowed funds to be sent to fund terrorists. Do you reckon that might not have killed someone - in fact more than "one".
    Anonymous
    16th Aug 2017
    6:38pm
    you are speculating Batara

    most of the laundering was by criminals ,

    anyway, these funds will be recovered, & the criminals behind bars.

    All turned out well in the end
    TREBOR
    16th Aug 2017
    7:28pm
    So crime causes no death? Hmm... interesting hypothesis you have there....

    I'd like to see a list of those criminals behind bars for this one... haven't seen or heard much in the media about that.. not saying it's not there....
    TREBOR
    16th Aug 2017
    9:29pm
    Now, Rafe - old dick - I've been quite reasonable to date with you, while you continue to seek confrontation on a personal level - but if you don't stop, son, you will feel my wrath in full.

    Last warning - cease your personal attacks and reply to the issues or get out.
    TREBOR
    16th Aug 2017
    9:55pm
    Oh, and 'my' Economics is University level - just one of my multiple strands - I just happen to draw different conclusions from the prevailing 'greed is good' outdated nonsense that is destroying the West and the people in it.

    Yours, Rafe, is drawn from a few beers at the pub with a few mates who know it all under the influence of truth serum, and who imagine that whatever they are told by 'City Hall' must be the only oil in town - and you try to call me a 'bogan'..... what a joke.

    No wonder MY country is in such a mess....

    16th Aug 2017
    3:36pm
    Well done CBA.
    Good corporate citizens as well as a great investment for mom and pop shareholders
    TREBOR
    16th Aug 2017
    5:31pm
    Make the Mafia proud, they would... Oz Medal Of Business Honour for them!!

    While the big shareholders get the job upon the board, get the fees and perks that go with that, and reap the lion's share of returns on share... mums and pops are crowing about what entrepreneurs they are for recouping $2000 a year from their CBA shares....

    (face palms)...

    Footnote:- If OG thought it was a good thing - it has to be wrong...
    Rae
    17th Aug 2017
    7:59am
    Yes just make sure if you are a customer you get out very fast before you pay for the nonsense. Leave the CEO, Directors and shareholders to sort it out by themselves.

    Customers will pay for these mistakes so best not be one.
    Bill
    16th Aug 2017
    4:16pm
    Gee, it sounds like the CBA is a pretty straight organisation. Maybe that's why Hawke (and Keating) couldn't wait to get rid of it and all those people who subsequently bought shares were buying summat thewy already owned ...... that always fazed me but still Hawky must seen this coming. Pragmatic I'd say.
    Anonymous
    16th Aug 2017
    4:46pm
    Bill
    CBA would be nothing like the banking powerhouse it is now had it remained in government hands.
    The government got a lot of money by privatising it and in return shareholders have reaped enormous benefits and Australia has a world class banking system
    TREBOR
    16th Aug 2017
    5:35pm
    Did it NEED to be a 'banking powerhouse' or just an honest broker?

    How does that fit with the lack of micro-economic infrastructure via wages and salary incomes within a framework of only twelve million workforce in a small nation?

    What are the returns to this nation via taxation etc that actually accrue from the operations of the CBA?

    Please explain (final mark for this essay constitutes 60% of final mark; all standard referencing rules etc apply - late submissions will receive a penalty of 10%)...
    Anonymous
    16th Aug 2017
    6:19pm
    what are you smoking Trebor.

    The money that the government got from the sale of the asset has been invested back into the economy to pay for pink batts and other labor schemes

    what the hell does "How does that fit with the lack of micro-economic infrastructure via wages and salary incomes within a framework of only twelve million workforce in a small nation" even mean ?????

    As for returns via taxation, - just work out how much CBA pays in Corporate Tax and how much all their employees pay in Income tax, plus the other industries and their employees that feed into and off of CBA
    TREBOR
    16th Aug 2017
    7:36pm
    We can see the results of all that investment back into the economy - clear as a toll road or heaped-up extra cost for anything...

    You'll work out one day that the very vast difference between toll-roading (generic term for robbing the workers) a nation of 350million and a nation of 23 million is..... the nation of 23 million does not have the workforce infrastructure to support that burden. simply put, there's not enough money in the overall pot to sustain it.

    Simple, eh?

    How much DOES CBA pay in corporate tax? At least their employee's income tax goes largely back into THIS economy whereas their pre-tax income largely etc largely goes Offshore.

    You with it yet? Many in this nation, not least those who claim to be running the show - need to come clean about this kind of thing.

    Now keep a civil tongue in your head when speaking with your superiors... I don't have the time or the inclination to continually own you day and night.
    TREBOR
    16th Aug 2017
    7:37pm
    .. and where exactly6 is this 'banking powerhouse' investing in THIS nation first and foremost, rather than in any cheap shot investment that comes along anywhere in the world?

    That's one reason we once had a 'people's bank' here - to see to THIS nation first, and not just greed is good.
    Anonymous
    16th Aug 2017
    8:38pm
    I can see there not much going on between your ears.
    and changing the subject from tax to pre tax profits makes no sense either
    Pre tax income goes no where. Is post tax dividends that are paid out, little boy.

    stick to yur backyard bbq economic and politic with your fellow bogans
    TREBOR
    16th Aug 2017
    9:26pm
    No answers, eh? Take your tablets and thank the asylum staff for your daily meals.

    Corporate tax is ONLY paid on income after all the deductions, and is often miniscule, and most often goes overseas these days or into a safe haven... not going to waste my time on your miniscule intellect listing those for you - do your own work.

    Are you trying to suggest that the poor long-suffering corporation pays tax on its gross incomes now? You run around in circles and go nowhere and think that insulting others is the only solution.

    Now go away, little boy. You are the bogan here with no idea at all, and the distance between your ears is about one molecule..

    Now try to keep your personal comments to yourself, you ignorant child.

    How much tax does the CBA actually pay? Got an answer?

    WHAT actual investment in AUSTRALIA does this 'banking powerhouse' provide?

    Where is all the wonderful outcome from all this money manipulation?

    If you don't respond like an adult next time I will break my golden rule and report you for being an insulting idiot.

    Owned again, fool - now try giving some answers that you actually understand.
    Anonymous
    17th Aug 2017
    4:27am
    Crikey
    I didn't realize you have mental issues
    Leave you to it then
    Good luck squire
    TREBOR
    17th Aug 2017
    10:05am
    Wisdom prevails. Now next time refrain from the personal vitriol and stuff, and you'll survive just fine.

    I've been certified by the finest shrinks the Vets people can offer as totally sane - you, on the other hand, need a good looking into.
    Anonymous
    17th Aug 2017
    3:48pm
    yes - you are legend in your own lunchbox.
    I just got tired talking to a fool. leave you to your delusions
    TREBOR
    17th Aug 2017
    7:45pm
    ..Well - you get an A for effort - as in ..... "AY?" You call THAT an effort?"

    Fora clown who can't capitalise his sentences or make any sense, and who relies on personal insults as your only means of discussion - you're a fine one to offer anyone a label.. you deluded fool.

    Now - next time you come on here - deluded one - you will remain within the bounds of decent conversation - you will not label anyone's opinions as 'stupid' or anything of the kind, and you will not cast aspersions on their person or character, and you will stick to the issues and make your comments in a reasonable manner.

    That, SON - is called 'flaming' - and it WILL get you banned.

    Now take the advice and learn to behave like a civilised human being and not the yob you clearly are.
    OnlyGenuineRainey
    17th Aug 2017
    12:29am
    Good to see one bank forced to do the right thing by its customers. Don't suppose I'll ever recover the hundreds NAB stole from me over twenty years ago by stuffing up loan documentation. I fought them for months, but couldn't afford the risk of court action, so I ended up just writing off the loss. Our big banks have way too much power and its management lacks integrity. Sadly, no amount of policing will ever address that properly.
    Anonymous
    17th Aug 2017
    3:50pm
    NAB was a promising bank. Made some bad decisions like investing in the UK at the wrong time.
    Its share price should be in the $60's by now. But its been one underperforming investment. Only upside is that their dividend payouts have been good
    Finni
    17th Aug 2017
    9:49am
    Should be an interesting share holders meeting, more so if all the mums and dad share holders show up, will be interesting to see how the super funds and top 20 share holders vote as they have the majority share holdings
    Last year the directors got a strike against them. A second strike I believe the board is spilled.
    Some one correct me if I am wrong
    Standing room at the M.C.C.For a share holders meeting


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