CBA releases list of regulatory ‘issues’ – are you a victim?

Font Size:

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?

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

RELATED LINKS

Money laundering scandal costs bank executives their bonuses

Commonwealth Bank board takes action over AUSTRAC scandal.

Will CBA scandal break the bank?

The CBA has allegedly enabled criminal syndicates to launder millions of dollars.

Review reveals Government banking tribunal isn’t needed

'Experts' advise the Government not to go ahead with a banking tribunal.

Written by Ben

57 Comments

Total Comments: 57
  1. 0
    0

    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

    • 0
      0

      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?

    • 0
      0

      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?

  2. 0
    0

    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.

    • 0
      0

      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.”

    • 0
      0

      Best thing they ever did was privatise the CBA.

    • 0
      0

      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.

  3. 0
    0

    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.

    • 0
      0

      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.

    • 0
      0

      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.”

    • 0
      0

      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.

    • 0
      0

      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.

    • 0
      0

      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

    • 0
      0

      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

    • 0
      0

      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

    • 0
      0

      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.

    • 0
      0

      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!

  4. 0
    0

    The problem is most of these payments will probably be gouged back from banking customers through increased fees, etc.

    • 0
      0

      Of cause losses are just made up some where else.

    • 0
      0

      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?

    • 0
      0

      The buck stops with him – perhaps it needs to be the buck-shot.

  5. 0
    0

    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.

  6. 0
    0

    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!!

    • 0
      0

      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.

  7. 0
    0

    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.

  8. 0
    0

    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

  9. 0
    0

    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

  10. 0
    0

    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……”

Load More Comments

FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Travel News

Australian government divided on lifting overseas travel ban

The federal government is divided about when international air travel will recommence for Australians, as consumers signal their intent to...

Food

Dietitian reveals the breakfast swaps worth making

If you're looking to live a healthier lifestyle, breakfast is a good place to start. It's the first meal of...

Finance News

COVID driving more older Australians into poverty

Many of us who endured lockdowns in Australia are familiar with the surge in energy bills at home. But for...

Lifestyle

Easy ways to make your home feel lighter and brighter

Homes tend to feel pokier the more time you spend in them - and at a time of worldwide claustrophobia,...

Technology

Why would people believe 5G causes COVID-19?

A significant number of people are concerned about 5G technology and believe it emits harmful radiation.  That's a rational fear...

Age Pension

Government's 'death tax' talks spark calls for universal basic pension

Federal government talk of scrapping the compulsory super guarantee and implementing a 'death tax' on drawdowns on deceased estates have...

Centrelink – Services Australia

Are legally blind pensioners entitled to more money?

Rob is legally blind and wants to know how this will affect his entitlements. Q. RobHow do I go through...

Health

Mozzies biting? Here's how to choose a repellent - and how to use it

Mozzies biting? Here's how to choose a repellent (and how to use it for the best protection) Shutterstock Cameron Webb,...

LOADING MORE ARTICLE...