Retirees to pay for CommBank's bad behaviour

Font Size:

The Commonwealth Bank of Australia (CommBank) will make superannuation and pension fund members foot the $80 million bill for its regulatory compliance, in a fee grab described by Financial Services Minister Kelly O’Dwyer as an “out-and-out gouge”.

A letter from the bank’s primary super fund Colonial First State told members they would be charged a “regulatory reform fee” of $102.40 next month. The new charge will cover what the bank described as “highly technical and complex” regulatory reforms.

According to figures from the Australian Prudential Regulation Authority (APRA), if the fee is passed on to all 780,000 Colonial First State accounts, it would raise around $79.95 million.

“The nature of these regulatory reforms mean we have invested significant resources ensuring we comply with them and we expect new reforms will continue to be introduced across the industry over the coming years,” says the bank’s letter.

This is a hike from the previous regulatory reform fee which was capped at $40. This new charge is on top of existing administration and investment fees.

Commonwealth Private clients also received a similar letter.

“This letter, on the face of it appears to be an out-and-out gouge of Commonwealth Bank customers. I cannot see on what basis they would be imposing this fee on customers,” Ms O’Dwyer told Fairfax Media.

“Compliance with the law is the cost of business, it shouldn’t be paid for using members’ retirement savings. There are clearly many other funds that are not choosing to charge members additional fees and members should consider whether their current fund is the best fit for them.”

Ms O’Dwyer expressed concern at the CommBank fee hike, saying that the Coalition is working on capping or banning such administration and investment fees, as well as inappropriate insurance fees.

While other super funds run by the Big Four banks plan to pass on some of the cost of regulation, the fees being charged are considerably lower.

CommBank claims that the charge is consistent with other super funds in the industry; however, Westpac-owned BT charged its customers an average of $26 last year to cover regulatory compliance. ANZ’s OnePath fund has a similar fee and NAB-owned MLC says it does not have plans to charge its customers for compliance.

An Industry Super Australia spokesperson says not-for-profit industry funds are subject to the same regulations, but he was not aware that they charged fees to cover regulatory compliance.

Considering CommBank’s misconduct was one of the primary reasons behind the banking royal commission, it seems unfair that the bank will pass on the cost of reform to its customers.

“It does seem weird that the government introduced regulatory reforms hoping to improve things, then they [CommBank] come along and say there’s a special charge for that,” said Alex Dunnin, Research Director at superannuation analysis firm Rainmaker Information.

CommBank confirmed the $102.50 figure, saying it was investing billions in implementing reforms.

“Every year we assess all regulatory reform expenses to ensure we can make the required changes and are only recovering from customers a portion of the costs incurred,’’ said a CommBank spokesperson.

Do you think it’s fair that you’re asked to pay a fee to cover the cost of CommBank’s misconduct?

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

Will the CBA share slide erode your retirement savings?

The CBA share price slide is eroding the life savings of millions of Australian retiree

CBA continued to charge deceased clients for advice

Bank identified offenders but handed out only a warning. That's all about to change.

CBA scrambles to tell customers of huge data loss

CommBank admits to losing data of around 20 million customer accounts.

Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

Contact:
LinkedIn
Email

79 Comments

Total Comments: 79
  1. 0
    0

    No. It’s not fair. You call it gouge? Many will call it , theft!
    Administration fees charged are for the purpose of regulatory reform or whatever the greedy banks want to deem it as.

    • 0
      0

      Agree.
      You may have seen Pauline Hanson last night call for the jailing of bank executives who orchestrated the fraudulent behaviour at all of our major banks.
      I have to agree that crooks should not be rewarded with golden parachutes or ‘we can do better’ outs which has always been the norm. After a few years you then get the next fraud and/or collapse, the reason being there is no punishment for those at the top who know they are untouchable.
      I hope Hanson keeps this one going. There needs to be REAL accountability and jail sentences + compensation paid to victims by bank executives behaving crookedly needs to be adopted. Then the game will end.
      In all of this we have to remember that Turnbull and his government did EVERYTHING possible to prevent this enquiry into banking…..to protect his mates. Bring on the election. “It’s time”!

    • 0
      0

      We agree MICK, those at the top should be held accountable and pay the fines or do the gaol time. They are prepared to cop the big salaries and bonuses when it’s others who are doing the work so why should the other side of the coin not be used. Any fines paid by the institution only affects the shareholders, not the decision makers who either caused the problem or turned a blind eye as a fix may affect their bottom line. Greed pure and simple.

    • 0
      0

      You know they would use the ‘we did not know’ out but my take is that the behaviour came straight from the top. Not as though CEOs and their management teams did not understand what their customers were saying as they were being defrauded or boiled alive. They did and it was POLICY.
      Now there needs to be no escape. Narev from the Commonwealth needs to personally pay all the costs to the bank for his leadership. No outs!

    • 0
      0

      Don’t tell me you didn’t see it coming? I certainly did and knew the customer would bare these extras costs of compliance.

    • 0
      0

      Of course, everyone should have seen it coming! So, why the outrage from the Minister – pretending to be a friend of customers??? Ha, we know much more about her party and her than to believe that!

      I agree with MICK “There needs to be REAL accountability and jail sentences + compensation paid to victims by bank executives behaving crookedly needs to be adopted. Then the game will end.”

      Also, they MUST NOT be allowed to pass on costs for allowing crooked behaviour through fees. Of course, if it is additional cost of business, it will affect their bottom line – as it should.

      I am not even sure there are any new regulatory reforms needed (maybe someone can clarify this) – it seems so far it’s just that crooks have been found out and the company management needs to take responsibility and pay for their poor management.

    • 0
      0

      … and they must never be allowed to practice again, even by proxy through some artificial entity called a ‘company’….

    • 0
      0

      Mick, is that the same ‘we did not know’ as your mate Short-on credibility used over the citizenship fiasco? Or the same one he used at the Royal Commission into Trade Unions? Oh, that was ‘I cant remember…’ So, if it is good enough for your hero Bill, why not for bank execs? Or is it one rule for Labor, and a different one for all others, Mick? Please explain? Hilarious you would quote Pauline, and even agree with her. Then again, Luke Foley seems to be on her wave length, as well!

  2. 0
    0

    Well, iz O’Dwyer can trumpet rage on behalf of the ‘victims’ here – but any thinking victim knew in advance that the banks would take any costs out of the contributor and not from the profits.

    Unless the government moves to re-regulate the banks or at the very least put controls over what they may charge fees for, that will always be the case.

    • 0
      0

      i.e. Miz Kelley in da big house is jest makin’ noises in the lead -up to an election… see, she really on our side despite dem past few years…. we silly ol’ slaves believe dat, eh, Rastus?

    • 0
      0

      Dis remind me o’ dat Gillard Julia Mk 1 lettin’ us SEE the REAL Julia an’ dat crap. That was an eye-opener – we saw the rabid feminist…..I ain’t got no use for dat… but now we’re expected to believe that Miz Odie, Pillager of the Pensioners, is really a sweetie at heart with a maternal interest in our well-being.

      **falls on floor laughing**

    • 0
      0

      TREBOR do you think it is appropriate for say a white person to paint their face black and pretend to be of African descent from the Caribbean (or anywhere else for that matter) for entertainment?

    • 0
      0

      Oversensitive KSS. Lets stay away from political correct BS. We are all too old for that nonsense and gender game.

    • 0
      0

      Oversensitive KSS. Lets stay away from political correct BS. We are all too old for that nonsense and gender game.

      Son – as a writer, one of my ‘teaching aids’ is a character named Rastus.. the reflection is not of some Kanaka or Kaffir, laddie – it is a reference to the essential slavedom of the majority of us…. Ol’ Rastus sure know ’bout dat…. gits me a job outta dis here cane fiel’… oh, yeah – dat da REAL life…

      Talk about internet autism……. Rastus Xavier is as philosopher who escaped the Haitian disaster and now holds down a professorship at Mythical University… and his teachings are used to show serious social discrepancies… ain’ dat da truth!

    • 0
      0

      So your answer is yes, then.

    • 0
      0

      Ain’ no thang….

  3. 0
    0

    All of the fees imposed by financial institutions are a cost of doing business, so O’Dwyer is just politicking when she talks about this issue. Any other business in a competitive environment absorb their cost of business fees into their profit margins, although I notice some trades are imposing call out fees and consumables fees, none of which I pay. If it’s not in their hourly rate then they can bugger off and I’ll choose another tradie.
    And this is at the nub of the whole issue. The FIRE sector has been deregulated and protected by successive governments for so long now that the sector sees it as their right to impose fees on customers while earning abnormally high returns for their shareholders.
    I would encourage people to vote with their feet whenever fees are imposed. As a consequence of me doing so, my bank charges me no fees on my everyday account. I pay no fee for my credit card, so like the trades previously mentioned, if enough people do the same then the competitive message will quickly get through and this parasitic fee gouging will cease.
    As for O’Dwyer …………. well, let me say that all politicians know an election is looming and the coalition are aware their policies are on the nose, so expect either side to make the right noises, more so the LNP who are fighting for their jobs. F…k them, a few terms on the opposition bench will do them good even though blinky Bill doesn’t fill me with confidence. Sigh!

    • 0
      0

      What’s wrong with costs coming out of profits like they used to?

    • 0
      0

      Because TREBOR we are now in the age of ‘user pays’.

      And it’s not just banks who are outsourcing their business costs to the customer. Have you not noticed the extra charges for having a paper bill, choosing to pay in in a manner other than the organisation’s preferred payment method (usually direct debit where you lose control of your bank account), preferring counter service instead of ATMs or on-line transactions and the list goes on.

    • 0
      0

      maelcolium,
      If, as you say, all the fees imposed are the cost of doing business why do they make such obscene profits? And why do the CEO’s and the top end of the businesses all seem to be paid Millions of dollars – sure the lower end should also share in these business costs [they never seem too]
      Yes, they charge interest on loans but there is no way that the interest alone would generate such profits – so they must be getting the money somewhere.
      Funny how their profits seem to go UP more when they add a new fee into the equation.

    • 0
      0

      I agree these are the new costs of doing business so those using that business will have to pay for them.

    • 0
      0

      User pays is just another lie to rape dollars out of those who are essentially fish in a barrel.

      Where is the service in ‘service industry’ these days – let alone ‘public service’?

    • 0
      0

      No it costs them more to be compliant with all the red tape and that costs money. So the service they provide costs more and that cost is born by the consumer.

    • 0
      0

      Lets not be silly. Uping your fees by $102 is pure robbery and mis conduct and the Commonwealth bank should be shut down and assets returned to the Australian people.

    • 0
      0

      Then why don’t they simply comply without coercion????

      Come in, spinners?

      You can’t win this one, OG and mates…..

    • 0
      0

      When, why, where and how does every cost of running a very profitable business fall on the consumer, regardless of poor or ill-managed or deliberately wrongful advice?

    • 0
      0

      Do the banks pay us a ‘user pays’ fee for using our money to play the international market for 2-3 days before they clear OUR cash?

      Ledt’s put this ‘user pays’ on a proper and level laying field…..

      Or should we all just continue to touch our forelocks to our ‘betters’, who can lie and cheat as much as they want without any fear of justice prevailing??

  4. 0
    0

    What else can you expect from Malturds minions,slimy rorting theiving filth,we have to find the breeding ground for these turds and eliminate .

  5. 0
    0

    NO DEFINITELY NOT. PEOPLE WHO BANK WITH THE COMMONWEALTH AND HAVE THEIR RETIREMENT MONEY WITH THEM SHOULD FIND ANOTHER BANK OR OTHER PLACE AND WITHDRAW ALL OF THEIR MONEY.
    THEY HAVE GOUGED ENOUGH FROM THE PEOPLE AND THEY ARE THE ONES AT FAULT. THEY HAVE CHEATED PEOPLE FOR YEARS. THIS IS PLAIN THEFT.

    • 0
      0

      All banks are bastards. They’re all as bad as each other.

    • 0
      0

      All financial institutions will bare these costs so if they say you are not paying them then they are not being upfront like the CBA about it.

    • 0
      0

      I doubt they will honestly bare these costs, OG – though they may well bear them – if they are sufficiently pressured….

    • 0
      0

      More compliance equals more cost. This extra cost is then passed onto the consumer through higher costs or extra fees.

    • 0
      0

      People who have left their super with the banks, in spite so much publicity over many, many years about their excessive fees have only themselves to blame, and this move clearly confirms why they should immediately move / rollover to Industry Funds (or SMSFs if they can).

    • 0
      0

      Hey guys, it’s “bear” not “bare”!
      What are these costs – mismanagement & cheating costs? Nobody has said that regulations as such were the problem?

      These appear to be simply costs of business (when you hire bad employees) which affects the bottom line, or else costs to be claimed from the Directors as compensation for allowing fraud / cheating / mismanagement.

    • 0
      0

      Can I be one of those ‘bad employees’ and a shareholder as well with an expectation of riches regardless?

      Where do I apply… and how do I escape legal sanction?

      Sorry, lads, the shareholders are going to have to carry this one for putting thieves in the top spot… you forked it – you fix it….

  6. 0
    0

    The banks have been getting away with grand larceny for years with the willing support of the LNP.
    It is time the owners of the banks paid the costs of doing business instead of off-loading onto captive customers.
    Any Commbank customers caught up in this grab should immediately transfer to an industry super fund of their choice, and rid themselves of the bankster leeches.

  7. 0
    0

    The crime by the Australian system against pensioners never end the is crime connect to the Governments member abuse Pensioners the Senat the law the system is against the all Australian Citizence rights The is violation all Civil rights the who pay tax

  8. 0
    0

    So glad I just got out of Colonial First State. The fees are so high and now an extra fee, ripping off every person with a superannuation account. Everybody should consider changing their super and they might be surprised how much you can make, when not hit with such high fees.

  9. 0
    0

    I received this letter. In fact I got three letters, one for each of the accounts they manage for me. The letter states “If you hold more than one account with us, you will only be charged this fee once.” But they’ve sent me three letters. I already pay administration and investment fees. And they want more. I will vote with my feet.

  10. 0
    0

    You all get in a lather of “outrage” and completely forget that CBA, from dividends, is a major contributor to most of the super funds in this country.
    Further, how and in which area of their operations they choose to generate profit, is entirely their decision.
    If an individual doesn’t like how they do it, then, exercise choice and change bank/fund/manager – simple!
    The never ending minority squeal for ever more regulation is nonsense.

    • 0
      0

      We prefer honesty and integrity……

    • 0
      0

      I agree with Not a Bludger. The old and wise saying of ‘Caveat Emptor’ seems to have conveniently forgotten by most. It is up to the individual to ensure that, firstly, they are aware of all the conditions that apply to their intended action, and secondly, if conditions change, to exercise their right to change to another provider who meets their expectations more closely. If you don’t manage your affairs properly, don’t bleat about having been hard done by. On the other hand, where actions by providers have been illegal, the slap on the wrist should turn into a meaningful penalty. A fine won’t cut it, it ends up being paid for by the shareholders. Jail time is the only thing that will have a definite impact on illegal behaviour. No apologies accepted. With the number of people most providers have monitoring compliance, it is an insult. But the final word is ‘Caveat Emptor’.

Load More Comments

FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Living in retirement

The emotional aspects of moving house in retirement

In his four years as a retirement coach, Jon Glass has been helping older Australians navigate the emotional facets of...

Property

Small bedroom tips to maximise space and style

For many of us, house space is a fiercely contested commodity, and you need to squeeze the most out of...

COVID-19

Aussies much more willing to be vaccinated than Americans

The United States has had nearly as many COVID-19 cases as Australia has people. More than 400,000 have died of...

Stylewatch

Goldie Hawn at 75: The Hollywood star's fashion and beauty evolution

Goldie Hawn, one of Hollywood's most beloved stars, is famous as much for her acting talents as she is for...

Government

US still reels from the deadly consequences of 'alternative facts'

Jennifer S. Hunt, Australian National University Every four years on January 20, the US exercises a key tenet of democratic...

COVID-19

Tennis stars call Australian Open quarantine 'insane' and like prison

Entitled, pampered, whingers. Elite sports professionals victims of the greatest overreaction to COVID-19 in the world. Those are the poles...

Finance News

RBA reveals why retirees have to bear the brunt of low interest rates

The Reserve Bank of Australia (RBA) knows that the negative consequences of low interest rates disproportionately affect retirees, but believes...

Diseases

Blood pressure medication helps even the frailest seniors live longer

Taking blood pressure medication as prescribed helps seniors aged 65 and over people live longer. And the healthiest older people...

LOADING MORE ARTICLE...