CBA to pay $3 million penalty over charging unjustified advice fees
Category: #world  By Sunil Hebbalkar  Date: 2018-04-13
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CBA to pay $3 million penalty over charging unjustified advice fees

Australian multinational bank, CBA has finally decided to pay $3 million in the form of penalty after the Australian Securities and Investments Commission found two financial planning arms of the bank charged millions of dollars from customers for the advice they never received.

As per reliable sources, in 2014, CBA had reported to corporate watchdog ASIC about this issue and it had paid $88.6 million as a compensation to customers.

According to ASIC, the financial planning firms of CBA claimed to have advised 31,500 customers between the years of 2007-2015, but they have now failed to prove it. The newly appointed chief executive of CBA, Matt Comyn apologized to bank’s customers for letting them down due to this breach.

Few days before this probe, CBA’s rival lender, ANZ Bank had paid compensation amount of $3 million and assured to overcome the breaches in its financial advice business. As per the sources, ANZ Bank had failed to provide annual review to more than ten thousand customers on their investments.

The ASIC declared that ANZ also agreed to reimburse the amount to Prime Access customers who had paid them between 2006 and 2013 but didn’t receive the documented review.

The latest penalty comes in the backdrop of the royal commission’s decision of conducting a public hearing in Melbourne about the misconduct in financial advice over the next two weeks. The major banks and AMP will face the inquiry in public hearing, cite reports.

CBA’s chief executive, Mr. Comyn stated that the financial services industry should learn from such hearings. He further added that the failures of the bank in providing financial advice during the last decade were unacceptable. Stating about the CBA’s failure in advice businesses, Mr. Comyn said that such incidents have caused strict regulatory actions comprising remediation programs and obligation of license conditions.



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Sunil Hebbalkar

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Sunil Hebbalkar

Sunil Hebbalkar develops content for Algosonline, Market Size Forecasters, and a couple of other platforms. A Post graduate mechanical design engineer by qualification, he worked as an intern at the defense lab for one year in the engine design and development departm...

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