CBA hit with class action over super

COMMONWEALTH Bank and its wealth management arm Colonial First State have been hit by a class action law suit over allegedly uncompetitive superannuation returns.

Law firm Slater and Gordon has filed proceedings in Federal Court and claims damages could exceed $100 million for hundreds of thousands of superannuation members.

The action alleges Colonial First State invested the retirement savings of its members with its parent bank, where the cash received uncompetitive bank interest rates.

CBA said it and Colonial First State will vigorously defend the proceedings.

“The class action will allege there is no excuse for Colonial First State to have accepted such a low rate from CBA when it could have easily obtained a higher rate — either from the CBA or from any other bank,” Slater and Gor- don head of class actions Ben Hardwick said yesterday.

“This class action will allege Colonial First State placed the interests of its members beneath the interests of the Commonwealth Bank,” he said.

Meanwhile, investment bank Morgan Stanley predicts Australian banks are facing a bill close to $5 billion to pay back customers they have ripped off.

Morgan Stanley said customer refunds and remediation costs, as well as associated penalties and fines, would cost the Big Four $4.8 billion for the three years from the 2018 financial year to the close of the 2020 financial year.

The analyst note came as Australian Banking Association chief Anna Bligh said the fee-for-no-service scandal was “much more widespread than people understood”.

The association yesterday announced amendments to its code of practice to end fees for no service and get banks to refund any incorrectly levied.