Just when you thought it couldn’t get any worse, banking executives have this week made some seriously bad admissions.
It seems even in death you can’t escape their fees.
The banking royal commission has heard Commonwealth Bank advisers charged dead clients for financial advice, in one case for a decade.
A 2015 document for CBA’s Count Financial business shows examples of advisers charging ongoing service fees after clients had died.
One adviser knew a client had died in 2004, but the adviser service fees were still being charged a decade later, the document shows. “When asked, he said he didn’t know what to do and he had tried to contact the public trustee and had not heard back,” the document noted.
Another customer of a different adviser died in 2007 and contact was made with the client’s wife in 2013 but no action was taken, the royal commission heard on Thursday.
These are just some of the stories coming out of the royal commission this week.
Senior executives from both the Commonwealth Bank and AMP were questioned at the royal commission this week.
According to counsel assisting the royal commission Mark Costello, Australia’s largest bank CommBank has charged more fees for no service than any other financial services company in the country.
Last month, Commonwealth Bank chief executive-elect Matt Comyn warned his staff that things “could get ugly” for the bank, but he probably didn’t realise just how ugly.
For example, as the Commonwealth Bank continued to slap fees on to dead customers for advice it wasn’t providing, the problem was noted as, “possible warning to adviser”.
One planner’s client had been dead for seven years before the planner contacted his widow, and then took ‘no action’ to fix the continuing charges. The adviser has been getting about $65 a month in fees.
Meanwhile, the CBA admitted it was the “gold medallist” when it comes to charging customers fees for no good reason,
Linda Elkins from CBA’s wealth management arm Colonial First State was asked: “It would be the gold medallist if [the corporate regulator] was handing out medals for fees for no service, wouldn’t it?”
Elkins simply replied: “Yes.”
The report found that 1050 clients were overcharged at least $700,000 for advice they did not receive because their financial planners had left the business before 2012.
It was noted 5000 clients could have been overcharged to the tune of $4.3 million.
Commonwealth Bank has been forced to refund $118.5 million to more than 310,000 customers after charging fees for services they did not receive. That’s more than half of the total $219 million compensation bill owed by the big four banks and AMP.
Financial Services Minister Kelly O’Dwyer today acknowledged “very disturbing revelations” and Turnbull says the banks “owe Australians an apology” but Australians need more than words. They need action.
We;ve hardly even begun. Under the existing timeline, the commission is due to provide a final report by February 2019.