CBA to refund $7.6 million in fees

Customers of the CBA could have a fee reimbursement coming their way.

CBA to refund $7.6 million in fees

Customers of the Commonwealth Bank's AgriAdvantage Plus package could have a fee reimbursement coming their way after the bank admitted it had not properly administered the product over seven years.

An estimated 8400 customers will receive the reimbursement, expected by the end of the month, after it was reported by the CBA to the Australian Securities and Investment Commission (ASIC) that the bank had failed to apply fee waivers and ongoing benefits of the package.

The AgriAdvantage Plus product enables a range of products, including business overdrafts, savings accounts and other lending facilities, to be packaged together and receive benefits, such as reduced interest rates and individual product fee waivers. First offered in 2005, the package is no longer available to new customers.

After discovering that some of the fee waivers and benefits had not been applied, the CBA notified ASIC in 2014 that it would investigate the problem and rectify the issue by refunding any fees where necessary. The review has been overseen by an independent expert to ensure the process was correct and timely, and calculations accurate.

ASIC Deputy Chairman Peter Kell said, “Identifying and reporting breaches is a key obligation for financial services licensees. Where errors occur, it is important that they be rectified promptly and appropriately. That includes restoring consumers to the position [where] they should have been had the breach not occurred”.

The CBA will notify all affected customers, with refunds due by the end of November. Customers do not need to apply for the refund, but if you think you may be entitled, you can contact the CBA on 1300 120 938.

Read more at ASIC.gov.au

Opinion: What about the others?

Well done CBA for identifying a relatively minor problem in your account administration process and refunding to customers what they are rightfully due. It’s just a pity that the bank hasn’t acted as quickly for those caught up in its well-publicised financial planning scandal.

Anyone who received financial planning advice from CBA financial planners can ask for their files to be reviewed, a process which is moving at an incredibly slow pace. It has been reported that only 19 of the 8835 customers who have requested a review have been compensated. And with the scheme available to 400,000 past and present clients, it could take a lot longer to resolve. Whether customers are compensated or not is at the discretion of the bank itself, although there is an independent review panel should customers not agree with the decision.

Several of the banks’ older customers have claimed that the CBA is simply dragging its feet in the hope that the clients won’t be around for too much longer. Merilyn Swan appeared at the Senate hearing into financial misconduct, on behalf of her elderly parents, in April this year and asked, "How long does my now 90-year-old father have to wait to see justice done?" And he’s not the only one.

The $7.6 million to be refunded to AgriAdvantage Plus customers is a drop in the ocean compared to what is due to those affected by the bank’s financial planning scandal. But when a bank posts a record $8.7 billion profit, there really isn’t any reason for it to drag its feet in compensating all who are entitled.

Should the CBA be forced to deal with compensation claims in a specified timeframe? Have you been caught up in either of these compensation schemes? 





    COMMENTS

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    20th Oct 2015
    11:43am
    It is utterly mind-boggling that a financial services provider is obliged to find and correct their own errors, breaches of conditions and failures to obey laws.
    This is like asking crooks to report their own burglaries.
    It appears ASIC only acts when multiple millions have been lost, and thousands of customers are complaining bitterly.
    The entire system needs a major overhaul - with independent random audits of financial providers being a good start.
    The banks can be trusted with nothing, the only thing that ever features prominently in banks actions, is that every action they take, is designed to protect the bank from scrutiny, and to protect the banks profits at all costs.
    ray from Bondi
    20th Oct 2015
    12:01pm
    good luck with that, banks are a protected species, the same as the private medical system.
    Anonymous
    20th Oct 2015
    12:34pm
    We had an adviser who worked for AMP and couldn't have done any worse with the way she handled our money, started crying and hung up on our phone calls to her, would not return calls, etc, etc. AMP's Customer Complaints Department, however, did listen to our grievances and after a lengthy period of correspondence and arbitration (108 days) we got every cent back which we had foolishly invested through her. Stress, investment interest lost, time and effort of course are not compensatated for, but are all still part and parcel of any such recovery action which you have to personally pay. Yes, a huge overhaul IS needed in the superannuation financial adviser industry, but the ASIC is as incompetent and incompassionate to the investor as is the ACCC is to the lowly individual consumer and will "consider" any remedial action ONLY when big business is losing a part of their multi-million dollar annual profit. Hypocrisy with these two organisations is as high as it is with local, state, and federal governments. Aaron, and fellow readers, we, as individuals, have next to no chance of having our single voices heard and responded to, never had, and never will until some intelligent, concerned, influential consumer crusader (like Ralph Nader) leads the battle to protect buyers' rights - no matter what product is involved.
    particolor
    20th Oct 2015
    2:47pm
    Fast Eddie.. Hear HEAR !!
    jackyd
    20th Oct 2015
    3:45pm
    Fast Eddie... nothing surprising about the conduct of AMP.... took me 4 years to get a matter resolved with them and of course the confidentiality clause means I'm stepping on thin ice evan discussing the issue. Happy to be finished with the #@&$! S.
    Tom Tank
    20th Oct 2015
    12:02pm
    Over the years we have been assured that businesses and businessmen are honest. A one word response to that is Volkswagen.
    Businesses, including banks, are only honest when they are forced to be by regulation which is policed and enforced.
    The much maligned "Red Tape" is, and was, there for a reason and its removal diminishes the ability to control outrageous, which perhaps is even illegal, behaviour.
    Adrianus
    20th Oct 2015
    12:47pm
    Debbie, I was horrified to read in your opinion piece of the 90 year old who was prayed upon by a Commonwealth Bank's CFP financial planner (product sales person on commission), and even more so to learn he was not the youngest. How can the CBA allow these people access to people of this age?
    The SMH extract......
    " In March 2010, two weeks after the whistleblowers went to ASIC's offices, the regulator seized Nguyen's (CFP salesman) files.

    The files were crammed details about victims, including an 88-year-old woman who signed a document, which Nguyen later filled in saying "generation of more income was not important to her". It also said her time-line for investments was seven years with access to funds after five years, when she was 93. The woman, who had invested $1 million with CFP, said Nguyen did not tell her $30,421 of her investment would be paid to CFP, including $16,732 in commission to Nguyen."


    Read more: http://www.smh.com.au/business/profit-above-all-else-how-cba-lost-savings-and-hid-its-tracks-20130531-2nhde.html#ixzz3p4CSUPY8
    Follow us: @smh on Twitter | sydneymorningherald on Facebook

    Of course we are talking about the same Bank which facilitated the Storm grab for cash by arranging a managed share trust fund specifically for Storm.
    Who trained these people?? The wolf of wall street???

    Apparently 7 financial planners from CFP were suspended. Of course we are only hearing about this as a problem because the share market crashed.
    When ruthless Life Insurance companies merged with Banks there was bound to be some bedding down problems emerging from the two vastly different cultures. But for a bank to relinquish it's responsibility to depositors so easily is beyond belief!!
    Biddy
    20th Oct 2015
    1:10pm
    Like all finacail services they think they have the God given right to charge what they like and when found out they believe they are hard done by there have been many companies that have gone bust and people have lost so much from this happening so it does need a big over haul but done randomly by independent bodies so the bank is not untouchable and cannot always be trusted,people put their faith in these companies trusting banks because they are just banks and think they can do no wrong,does not matter which bank they all should be answerable to the people,I have been stung by a couple of financial companies and can never recoup what has been lost,with the Government saying work save and invest is quite q joke because if you invest there is always the chance of them going bust and take all your money,so hopefully if there is Government regulations and someone over seeing theses companies there may be less of a chance of loosing your money one hopes so there also there should be random scrutinty for this

    20th Oct 2015
    4:36pm
    Luckily some 20 odd years ago I went to a financial product fest where there were many different products to chose from then I spotted someone whom I new selling a product low and behold when I worked out who he was ( a car salesman) he had sold me a dud car some years previously and he was now selling financial products under someone elses licence.
    THat was it for me havn"t been near one of those crooks since.
    Adrianus
    20th Oct 2015
    4:43pm
    Different place same story. He may pop up as a Senator next?
    retroy
    20th Oct 2015
    6:34pm
    I have always considered banks as legalised thieves but there can always those who want to repent!
    Take the interest that they pay to super annuitants which is less than they pay to a depositor who comes in from the street.
    I once asked them why, and all they could say it was a different product!
    I changed banks and got more but I don't suppose they noticed my departure.
    If everyone checked around to see what other banks are offering then perhaps a it could make a difference, but most people I talk to about the subject, tell me it is just too difficult for them to shift banks
    Claudius
    20th Oct 2015
    6:42pm
    We are ruing the day that the citizens of Australia, through our political domain, enabled the Banking industry to aspire to and become the most prosperous institutions in our capital market system. It is utterly ludicrous that an essential service industry is enabled to do this off the backs off the long suffering community.
    At the time of her departure as CEO of Westpac, a comment was made by one of financial commentators that her replacement, Brian Hartzer would have difficulty, in the current climate, emulating the performance track record of Ms Kelly. Well, it hasn't taken him long to fly his colours from the flagpole of greed, judging by Westpac's latest behaviour. Remember some years ago when Westpac tried to justify its interest rates increase by using the analogy of the price of bananas when scarce in the market!
    What chance do we stand of seeing social justice in banking when they all subscribe to a incentivised remuneration system based on profit. The largesse associated with executive remuneration is of a magnitude that would compromise the moral rectitude of the honourable of human beings.
    Adrianus
    20th Oct 2015
    7:26pm
    Claudius we had no problem with bank behaviour until the 1990's when one of Labor's "worlds greatest treasurers" decided to change the way they operated. They opened the hen house and let the foxes in. Then sold CBA, effectively selling it's customers down the gurgler. Labor are better off doing nothing.

    22nd Oct 2015
    1:27pm
    whoever thought it was a good idea to deregulate banking?