ASIC lashes banks again on fees-for-no-service scandals

Finance bodies ‘too slow’ in reviews of fees-for-no-service scandals: ASIC.

bankers

Six of the major banking and financial services institutions condemned by the financial services royal commission for their ‘fees-for-no-service’ practices have again been lashed for inaction, prompting some commentators to question whether bankers can change their spots.

AMP, ANZ, CBA, Macquarie, NAB and Westpac are yet to complete further reviews to identify systemic fees-for-no-service failures beyond those reported to the regulator since 2013, the Australian Securities and Investments Commission (ASIC) has revealed.

AMP has told ASIC it doesn’t expect to complete its review of customer remediation until the second half of 2021.

ANZ has not provided an estimated timeframe. Macquarie says it expects to wrap up its remediation program mid year – but ASIC is unhappy with its proposed rate of compensation. Neither NAB nor Westpac have offered estimated completion dates or methodology for reviews of their subsidiaries, while the Commonwealth Bank has completed its review but intends to start another.

ASIC said the big four banks and AMP expected to pay more than $1.15 billion in compensation, including about $350 million already paid or offered to customers.

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, headed by Kenneth Hayne, was told that some clients were charged fees for financial advice 10 years after they had died and that customer complaints dated back to 2008.

ASIC commissioner Danielle Press said the reviews had been “unreasonably delayed” and welcomed the Government’s commitment to give ASIC new powers to speed up the process.

She said ASIC acknowledged that the reviews were large scale, relating to systemic failures going back six to 10 years and covering 36 licensees from the six institutions that authorise more than 7000 advisers. “However, we believe the institutions have failed to sufficiently prioritise and resource their reviews,” she said, “particularly as ASIC advised them to start the reviews in mid-2015 or early 2016.”

The main reasons cited or blamed for delays were:

  • poor record-keeping and systems within the institutions, which mean that in many cases they have been unable to access customer files for review
  • failure by some institutions to propose reasonable customer-centric methodologies to identify and compensate customers, despite ASIC’s clear articulation of expectations
  • a legalistic approach.

In his final report, Mr Hayne said he had informed ASIC that at least two entities may have broken the law and engaged in dishonest conduct by charging fees for no service. Mr Hayne invited the watchdog to consider whether it should begin criminal or other legal proceedings.

Do you believe the royal commission has produced sufficient reform in the financial services sector? Is ASIC moving fast enough and showing enough muscle?

RELATED ARTICLES





    COMMENTS

    To make a comment, please register or login
    Old Man
    13th Mar 2019
    10:58am
    The banks have become staff light and technology heavy and this has produced this ridiculous time frame to sort out the mistakes made. The warnings were given in mid 2015 and if AMP completes the review in "late 2021" that means 5½ years to check records that should be on a computer system.

    I believe that the Royal Commission, given the time frame, has done a good job and we mustn't forget it's scathing assessment of APRA and ASIC when we talk about what the financial industry. Surely a cleanout of these entities has to be a part of the solution.
    Arvo
    13th Mar 2019
    11:14pm
    Surely, fees for no service and charging fees to dead people is an act of organised crime.
    Rae
    13th Mar 2019
    11:52am
    How about lashing bank customers for being so stupid as to keep paying for nothing. Stop being lazy and move your banking.
    MD
    13th Mar 2019
    5:59pm
    Fair comment Rae, just catch a bus/taxi/uber and failing that, don't park your car outside the new bank - imperative it has a drive thru system.
    Rae
    14th Mar 2019
    12:00pm
    I haven't been inside my bank since 1985. I ring them and they sort it for me. You don't have to visit an actual building to open an account and no I don't do computer banking either.
    ozrog
    13th Mar 2019
    2:19pm
    Nothing will happen the royal Commission was a waste of time and money. LNP have already let brokers of the hook. Their mates will be next.
    Knows-a-lot
    13th Mar 2019
    4:00pm
    The banking bastards need to be penalized so harshly that they'll give up their nefarious practices for good. They must never be allowed to forget!
    Returned Serviceman..
    13th Mar 2019
    4:45pm
    Rae that is a great idea blame the victim, so if you park your car and it gets stolen it is your fault for not sitting in it.
    Rae
    14th Mar 2019
    12:09pm
    I got the stereo ripped out of the car when parked near a popular beach track. Lesson I never parked there again.

    Next time it was parked in Wilson's secure parking. Never been back there either.


    Banks can be very bad. Some of mine were and I moved my banking to another one.
    I was forced to sell a house borrowing at the wrong time from the wrong bank.
    Nobody gave a rat's it was all business as usual.

    People need to take a bit of responsibility. Just sitting around waiting for the Government to fix things isn't working.

    If I had my way I'd follow Iceland and gaol the worst of the banksters and nationalise the best but that is not going to happen here is it? Can you imagine the screaming if all those lovely bank dividends failed to turn up each half year?

    When Government fails the only solution is to look after yourself and your own.
    floss
    13th Mar 2019
    5:03pm
    Greed is hard to prevent when it is encouraged by the LNP.it is how they operate .
    Erin
    13th Mar 2019
    6:20pm
    ASIC is a toothless tiger as well as clawless.
    In July 2018 I sent a request to CBA/CFSIL for a refund for fees for no service and was told I was not entitled to it.
    Banking misconduct is continuing. They are unconscionable and completely lack integrity.
    ASIC is the same when strata owners complain about the misconduct of strata managers trying to take over the management of the Scheme without having been given full delegation, refusing to return financial documents when their term finishes and refusing to pass on the Strata Roll.
    Erin
    5th Jun 2019
    4:12pm
    CBA staff told me in July 2018 that I wasn't entitled to a refund. Then they made an offer and when I asked if it included interest they told me I was not entitled to interest because it was not a refund, but a 'goodwill'/'ex gratia' payment'.

    Their banking misconduct has progressed to 'incalcitrant' conduct, as well as being criminally deceptive and unconscionable. They completely lack Integrity which is:

    "Integrity is a steadfast adherence to a strict moral or ethical code and the practice of being honest which is truthfulness and freedom from deceit or fraud".

    I've lodged a complaint with AFCA.


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles