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
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?