Another 100k bank customers ripped off by advisers
More than $200m to be paid out in compensation, says ASIC
A further 100,000 customers have been ripped off in a banking 'scandal' costing in excess of $200m, the financial regulator has revealed.
The Australian Securities and Investment Commission (ASIC) has found major financial institutions, including AMP, ANZ, NAB, Commonwealth Bank and Westpac, have been charging customers fees for ongoing financial advice they were never given.
Some customers paying for the service would receive consultation intermittently, while others weren't assigned a financial adviser altogether.
The tally of customers wrongly charged has now climbed to 300,000 in total, with the compensation also rising to $205m.
Commonwealth Bank will be paying for more than half at $106m. Following is ANZ at $52m and NAB's superannuation trustee, NULIS, at $35m.
ASIC described the breaches as "systemic" in its statement and claimed most of the failures occurred prior to the Future of Financial Advice reforms, a suite of legislative changes implemented in July 2013 addressing the incentives paid to financial advisers.
"The changes made by those reforms were a significant factor in the identification of the failures, and also substantially reduce the likelihood that the type of systemic failures described in this report will occur in the future," says the statement.
The startling findings are part of an ASIC investigation and follow the publication of the report Fee for no service in late 2016. The report originally found 200,000 people were impacted.
Similarly, ASIC recently released a report examining the mortgage broker
industry, which found commission structures incentivise brokers to act in
the interest of banks – and not customers – by issuing loans that are
larger, riskier and take longer to pay off.