Big banks slow to act
Corporate cop pans ‘unreasonable’ delays
THE corporate watchdog has lashed Australia’s biggest financial institutions for “unreasonably” delaying investigations into scandals in which they charged customers for services they never provided.
The Australian Securities and Investments Commission has warned the six big players – AMP, ANZ, the Commonwealth Bank, Macquarie, National Australia Bank and Westpac – that it was looking forward to using new powers agreed to by the Federal Government.
Those powers would enable ASIC to compel banks to put proper compensation programs in place.
The regulator yesterday issued a detailed report card on the failings of the institutions.
It reveals its concerns over inadequate compensation schemes at ANZ and Macquarie, a “fundamental disagreement” with the CBA over evidence gathering, and that NAB subsidiary JBWere has so far not even agreed a method for working out which customers were dudded.
Commissioner Danielle Press said the institutions had “failed to sufficiently prioritise and resource their reviews, particularly as ASIC advised them to commence the reviews in mid-2015 or early 2016”.
Key reasons for the delays were given as poor record keeping and a failure by some of the institutions to put forward remediation schemes that properly identified and compensated customers hit by ASIC commissioner Danielle Press criticises the major banks for their slow response in looking into failings the fee-for-no-services scandals. Another main reason included a “legalistic approach” to figuring out the services to which clients were entitled, ASIC said.
The reviews cover potential fee-for-no-service rip-offs that are additional to those the institutions have reported to ASIC since 2013.
That was when the regulator first began to seriously examine the finance sector’s long-running habit of charging customers but giving them nothing in return.
Together, the six institutions have so far paid or offered $350 million in compensation and expect to shell out a total of about $800 million once the new reviews are finally complete.
“These reviews have been unreasonably delayed,” Ms Press said.