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

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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?

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Written by Janelle Ward


Total Comments: 13
  1. 0

    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.

  2. 0

    How about lashing bank customers for being so stupid as to keep paying for nothing. Stop being lazy and move your banking.

    • 0

      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.

    • 0

      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.

  3. 0

    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.

  4. 0

    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!

  5. 0

    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.

    • 0

      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.

  6. 0

    Greed is hard to prevent when it is encouraged by the is how they operate .

  7. 0

    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.

  8. 0

    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.

  9. 0

    I really hope that the following will help other elderly, vulnerable customers of Commonwealth Financial Planning Limited – My statement on the CBA’s Facebook Page:

    “Colonial First State Investments Limited (CFS) defrauded me of $1,301.83 after I requested a refund plus interest for fees for no service after the Banking Royal Commission, stating that when I signed my 2009 Agreement it illustrated that I had only agreed to pay ‘Adviser Service Fees’, which were not ‘Ongoing Fees’, and therefore I was not entitled to any sort of refund.

    This has gone on from July 2018, and a CFS staff member even sent me a twelve (12) page copy of my 2009 Agreement, as well as recently this year, three staff members of CBA Group Customer Relations (GCR) and Commonwealth Financial Planning Limited (CFPL), as well as my first AFCA case manager in early 2019.

    However, immediately after I signed my 2009 agreement CFS set up my ‘Transaction Account’ which explicitly displays ‘ADVISER SERVICE FEES – ONGOING’ – from March 2009 to 2017 when the charges stopped. CFS only forwards FirstChoice Wholesale Pension Statements to its customers NOT copies of their Transaction Accounts, which you have to get online, and can be difficult, especially if you do not have a computer.

    Therefore, as an elderly customer, I allege that my 2009 Agreement, as well as those of other elderly customers, were virtually invalid because the details had changed, and I hereby allege that the invalid agreement was continually, and purposely used to exploit and defraud.

    Irrespective of my above comments, I still did not receive the advice I paid for, and I hereby allege that it was ‘To Dishonestly obtain Financial Advantage by Deception’.

    My financial loss is a small amount, although I really needed it and was entitled to receive it, but I have also lost my entitlement to being Compensated for Misconduct, as stipulated by ASIC, because CBA GCR refused to pass on my complaint to its Internal Dispute Resolution Platform i.e. RG 271, which would have been forced to report the misconduct to ASIC, which is now empowered by Law to check all Australian Internal Dispute Resolution platforms relating to complaints, responses and misconduct, and I allege that the CBA GCR staff were obviously trying to conceal their behaviour as well as the CBA’s continuing systemic misconduct.

    However, apart from myself, there could be a multitude of other vulnerable, elderly customers who were either completely refused refunds at the very beginning OR were offered ‘Goodwill’ payments, which definitely do not apply according to Law as to how refunds plus interest for fees for no service should be compensated/remunerated to customers.

    These ‘Goodwill’ payments were considerably less than what they had been entitled to according to ASIC’s Regulatory Guide 256, which explains how refunds must be calculated by Law. These customers could still be unaware they were also exploited and defrauded going back as far as 2013!!

    Both CFS and CBA GCR also ignored the ASIC Corporations (Ongoing Fees Code) Instrument 2016/1129.

    The CBA GCR staff member then made me two offers of $2,000. I refused to accept these offers because the CBA had not reported its continuing systemic misconduct to ASIC, which was mandatory, and I would have been forced to sign an agreement which would have prohibited me from taking any further action.

    After I refused the two offers he then refused three times to pass my complaint onto the CBA’s Internal Dispute Resolution (IDR). He even stated in an email that the GCR was the same as the IDR, for CFS and CFPL, which contravenes what I’ve found that ASIC stipulates as to how IDRs should be undertaken and processed i.e. a different platform from the ‘Group Customer Relations’ platform.

    He then cancelled my complaint on 18.2.2020, even though I had attached multiple ASIC Regulatory Guides, together with information about the FOFA Reforms (which I recently found out was the FPA’s Professional Ongoing Fees Code) which stipulated that “a fee however described or structured becomes an ‘ongoing fee’ if charged for more than twelve months”. He completely ignored this Code.

    I was then forced to lodge a complaint with AFCA, but the case manager did not report the systemic misconduct to ASIC either. This went on for over 8 months and I was then forced to withdraw my complaint because the case manager advised that he had passed it on to the AFCA Ombudsman, without including the further proof I had provided about invalid agreements etc. and the Ombudsman could well have issued a final ‘Determination’, which I allege may well have been in favour of the CBA and could possibly have involved bribery.

    I was then forced to lodge a formal complaint with ASIC. This has so far been unsuccessful because the systemic misconduct was ignored by an ASIC staff member who was probably informed by CBA GCR that I had signed an agreement to not take any further action which was deceptive, so I was therefore forced to lodge a further complaint.

    How is this unconscionable and systemic misconduct still going on after the Banking Royal Commission?

    If ASIC does nothing, for which it has been severely ridiculed for in the past, I hereby declare that I will definitely take this issue to the Media and will also be mentioning APRA, the BCCC and Ausbanking, together with other financial services organisations which have virtually done nothing after I provided them copies of the systemic misconduct information relating my complaint.

    I’m a 78-year old pensioner and am still suffering from the trauma I have been put through which was completely unnecessary. My issue could well have been resolved within 3-5 weeks or a little more, in Mid 2018 if I wasn’t continually given deceptive information and claims which continued up to February 2020.



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