24th May 2018

Retirees to pay for CommBank's bad behaviour

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commbank customers
Leon Della Bosca

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?

Related articles:
CBA share slide eats into super
Royal commission takes first scalp
Are your savings at risk?





COMMENTS

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HS
24th May 2018
10:31am
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.
MICK
24th May 2018
11:50am
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"!
Old Man
24th May 2018
12:27pm
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.
MICK
24th May 2018
12:36pm
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!
Old Geezer
24th May 2018
2:58pm
Don't tell me you didn't see it coming? I certainly did and knew the customer would bare these extras costs of compliance.
George
24th May 2018
8:38pm
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.
TREBOR
25th May 2018
12:06am
... and they must never be allowed to practice again, even by proxy through some artificial entity called a 'company'....
Big Al
25th May 2018
4:16pm
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!
TREBOR
24th May 2018
10:55am
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.
TREBOR
24th May 2018
10:59am
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?
TREBOR
24th May 2018
11:02am
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**
KSS
24th May 2018
12:24pm
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?
MICK
24th May 2018
2:18pm
Oversensitive KSS. Lets stay away from political correct BS. We are all too old for that nonsense and gender game.
TREBOR
24th May 2018
2:44pm
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!
KSS
25th May 2018
12:41pm
So your answer is yes, then.
TREBOR
25th May 2018
2:20pm
Ain' no thang....
maelcolium
24th May 2018
11:46am
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!
TREBOR
24th May 2018
12:04pm
What's wrong with costs coming out of profits like they used to?
KSS
24th May 2018
12:29pm
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.
jaycee1
24th May 2018
2:19pm
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.
Old Geezer
24th May 2018
2:38pm
I agree these are the new costs of doing business so those using that business will have to pay for them.
TREBOR
24th May 2018
2:47pm
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'?
Old Geezer
24th May 2018
2:56pm
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.
ozrog
24th May 2018
5:55pm
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.
TREBOR
24th May 2018
11:58pm
Then why don't they simply comply without coercion????

Come in, spinners?

You can't win this one, OG and mates.....
TREBOR
25th May 2018
12:00am
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?
TREBOR
25th May 2018
1:04am
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??
Hairy
24th May 2018
11:55am
What else can you expect from Malturds minions,slimy rorting theiving filth,we have to find the breeding ground for these turds and eliminate .
Joy Anne
24th May 2018
12:06pm
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.
Knows-a-lot
24th May 2018
1:17pm
All banks are bastards. They're all as bad as each other.
Old Geezer
24th May 2018
2:39pm
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.
TREBOR
24th May 2018
2:48pm
I doubt they will honestly bare these costs, OG - though they may well bear them - if they are sufficiently pressured....
Old Geezer
24th May 2018
2:54pm
More compliance equals more cost. This extra cost is then passed onto the consumer through higher costs or extra fees.
George
24th May 2018
8:42pm
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).
George
24th May 2018
8:47pm
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.
TREBOR
25th May 2018
12:09am
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....
Travellersjoy
24th May 2018
12:07pm
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.
Marian
24th May 2018
12:11pm
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
Big Al
25th May 2018
4:21pm
Thanks for that dyslexic contribution, Marian - well spoken!
Jacky
24th May 2018
12:12pm
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.
V1K1
24th May 2018
12:18pm
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.
Not a Bludger
24th May 2018
12:28pm
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.
TREBOR
24th May 2018
2:50pm
We prefer honesty and integrity......
World Prophet
27th May 2018
9:48am
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'.
KSS
24th May 2018
12:43pm
Selective reporting and commentary as usual.

This is not "Retirees to pay" at all. It is not being only imposed on retirees, but at all 780,000 Colonial First State accounts; some of whom may well be be retired or pensioners; but not all.

And as for Commonwealth Private customers; they have an income of over $400,000 or are intending to borrow or invest $2.5million or more, those are the conditions of being a Commonwealth Private customer. I thought the general consensus here to date has been that it's ok, nay desirable, to gouge the wealthy!
TREBOR
24th May 2018
2:51pm
PBI - Poor Bloody Investors.....
Raphael
24th May 2018
12:43pm
It’s called user pays
Stop making this a political issue . It’s just good business sense
TREBOR
24th May 2018
2:52pm
It's unconstrained business.... demanding that it be re-regulated to some extent.....

Capitalism rampant is no better than communism rampant.
Mad as hell
24th May 2018
12:47pm
Ms Kelly O’Dwyer thanks for sticking up for the pensioners, now if your government reverses the changes to the Pensioner Assets Test I’ll vote LNP. Maybe.
MICK
24th May 2018
2:20pm
Ha, ha, ha. Funny. Think I'll go skiing in the Bahamas next year.
George
24th May 2018
8:49pm
Good one!

24th May 2018
1:27pm
If youre not in an industry fund you are being ripped off.
MICK
24th May 2018
2:22pm
Tried to get Not A Bludger and Raphael to post the returns for top 3 Industry and Retail Funds to assess if their claims of 'union thuggery' were correct or otherwise.
SO FAR NO TAKERS. Clearly this was right wing sponsored propaganda. I feel an election coming!
Raphael
24th May 2018
5:06pm
Industry funds are run by union thugs being paid hefty fees on top of what they get from positions in the union hierarchy
They have they dirty noses in lots of troughs - ripping off members any which way they can
It’s time this rip off of members funds by unions is put to an end once and for all
Old Geezer
24th May 2018
5:27pm
I agree Raphael. You are right industry funds are worse than retail funds and rip off their members just as bad if not worse.
Anonymous
24th May 2018
10:41pm
Industry funds get the best returns every year. You're so called Union thugs don't appear to steal as much as the banks then!
TREBOR
25th May 2018
12:02am
Ah - so it's a question of how much (as the passenger said to the air hostess).
Old Geezer
25th May 2018
1:49pm
If I had to have my money in an industry fund or a bank I'd pick the bank any day over industry funds.
TREBOR
25th May 2018
2:22pm
Your ideological concerns are noted, OG - as is your utter lack of sense.....

24th May 2018
1:34pm
I don't keep much money in the bank , I don't pay interest on my credit card ,I won't use their financial services such as their super funds because they are a rip off, I don't have a loan or am I likely to. So the banks are a convenience that I pay very little for. I am probably not the customer they want, you won't believe how happy that makes me. :)
disillusioned
24th May 2018
1:35pm
Why don't they take the money out of the CEO's squillion dollar bonuses? Get those at the top to hand back most of their super dooper salaries and bonuses for the past 5 years? THEN, and only THEN, will these guys that got the banks into the strife they are in through sheer negligance of their duty of care to their customers, sit up and take notice! Hit these guys where it hurts, in their back pockets, Turnbull!! BEFORE you give the banks further indulgences in the form of tax cuts, etc.
TREBOR
24th May 2018
2:54pm
Those who inflict harm upon others without reason should be shown that there are consequences....... just like children, they cannot simply go on and on doing harm to others without being pulled up short.

The banks have had their free ride for years no - they've had plenty to get along with - time to Lock The Gates!
George
24th May 2018
8:50pm
Good suggestion - Turnbull, where are you???
TREBOR
25th May 2018
1:06am
Oh, Brother, where art thou?
jaycee1
24th May 2018
2:08pm
Iceland, I believe, was the only country in the world to jail their bankers after the last banking collapse [which banks caused].
They are also the only country that is actually doing better now than before, [fees etc] their banks know they won't get away with the shit that Australia and other places have to put up with.
It is time that our government put its foot down and told ALL businesses [banks included] that their behaviour is NOT acceptable and to change it immediately.
Sadly it will never happen.
TREBOR
24th May 2018
2:55pm
We're gonna need a bigger and more automated, well-greased guillotine......

It is perfectly within the province of government to impose some or all regulations on banking, and since the banks have shown they are more than just naughty little boys, they need to be cwucified.. and cwucified well.
Old Geezer
24th May 2018
2:36pm
Good idea it should be passed on to those who use the service. I have already said that the royal commission was nothing but a witch hunt and people will pay for more red tape on their investments. Well this is exactly what I said would happen. Nobody listened so now every body whingers.
TREBOR
24th May 2018
2:56pm
Nay - it should be passed on to those who've abused their service..... theft as a servant in Scotland involves a double penalty...
Old Geezer
24th May 2018
2:59pm
They are well gone now so only person left to pay is the consumer.
TREBOR
25th May 2018
12:03am
Statute of Limitations..... they may resign - but they are still there for the plucking.... and a royal plucking it should be...
4b2
24th May 2018
3:35pm
I believe the fee last year was around the same figure not $40.00. This year I am up for 2 fees of $102.50 because I have a super fund and a pension fund with this mob.
I am looking to move to an industry fund after the Royal Commision finishes.
ozrog
24th May 2018
5:52pm
Only fools would keep their money in combank super.
Transfer to another fund with less fees.
The only reason combank charge is because silly people stay with them.
TREBOR
24th May 2018
11:56pm
Let us look at this in a different light. (ha-ha-ha ... snuckles ... you decent people out there will love this)...

If and when an organisation seeks to compensate itself for past malfeasance, because of either deliberate misleading of clients or simply poor control over advice given to clients due to negligence or neglect or (gasps) even deliberate policy...............

(wait for it... wait for it!) .......

Any proceeds from this, including fees levied to correct it, should properly be viewed as Proceeds of Crime (or neglect or deliberate malfeasance), and should be confiscated and placed into a fun to compensate victims...........

Come in, spinners.....
TREBOR
25th May 2018
12:04am
Damn - not 'fun' .... FUND!
TREBOR
25th May 2018
12:15am
DAMN - I'd like to see some answers to this!

KSS walked into a semantic trap yesterday.... let's see how the Team goes today....

A 'class action' should surely be looking at proceeds of deliberate/policy malfeasance being RICO'd.....

I'm gonna love this one........
niemakawa
25th May 2018
2:23am
What is happening to this once great and wonderful Country of ours. The social fabric of our cities has changed beyond recognition over the past 20 years. Time for real change and all the mainstream Political Parties brought to account for destroying Australia. CBA is but a small part of the problem. This is the result of Globalisation which has brought nothing but pain for the Nation as a whole. God bless Australia.
GrayComputing
25th May 2018
6:45am
It is time for all of us to rant at our PMs to take action for human decency and a huge stress reduction for pensioners

NO ASSET TEST FOR A PENSION EVERV AGAIN!
A pension is not welfare.

Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules
Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly,

Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

Does your MP really like being part of the system that allows this indirect abuse of the elderly?

This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?

Some opposition and independent MPs stand to lose their chance at being part of the needed government changes

We all need to tell our MP that these criminal asset tests for a pension must be dropped now.
NO ASSET TEST FOR A PENSION EVER AGAIN!
disillusioned
26th May 2018
1:29pm
Almost got pressured into joining the super scheme for this mob after my uncle died and left me a small inheritanc, which I decided to put into super. A friend advised that he had been with them for a while, and their fees (even then) were exorbitant. So I stayed with FSS, the fund I was in when working, and they set up a separate account for me so I could draw down on both accounts when I retired (which I have subsequently). Very glad I made that choice!!
Jtee
28th May 2018
8:27pm
I haven't had any correspondence regarding this charge. That will be the final nail in the coffin for my superannuation account with CFS.


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