The banking royal commission’s interim report, due on Friday, will look at policy issues arising from the first four of its six rounds of public hearings.
It will cover consumer lending, financial advice, loans to small businesses and issues affecting farmers and indigenous Australians, but not the most recent hearings on superannuation and insurance.
THE $1 BILLION FEES-FOR-NO-SERVICE SCANDAL
The fact that Australia’s major banks and financial institutions have charged customers for advice they never received is no surprise, given the regulator started looking at the problem in 2015.
But the royal commission has helped reveal just how bad the problem is, with ASIC tipping compensation to customers will top $1 billion.
Evidence claimed the jobs of AMP’s CEO and chair, with counsel assisting the inquiry recommending Australia’s largest wealth manager face criminal charges for lying to ASIC.
The Commonwealth Bank also earned the dubious title of the “gold medallist” of charging customers for financial advice they never received.
CHARGING DEAD PEOPLE FEES
Revelations that some advisers at CBA subsidiary Count Financial continued charging clients fees after they died, in one case for more than a decade, sparked action to see if others had done the same thing.
The inquiry heard CBA’s superannuation fund trustee knew in 2015 it was charging advice fees to members after being told they had died but continued to do so until this year.
National Australia Bank also admitted charging more than 4100 dead super members $3 million in adviser service fees.
AMP owes more than 4600 deceased superannuation members’ estates about $1.3 million in life insurance premiums, charged when there was no longer a life to insure.
Royal commissioner Kenneth Hayne QC thought it should have been quite simple: “Notification of the death. Payment stops.”
ROUND ONE ON CONSUMER LENDING
Spotlight on: Mortgages, car loans, credit cards, overdraft facilities and “junk” add-on insurance products
Companies examined: NAB, Aussie Home Loans, CBA, Westpac/St George, ANZ/Esanda
Revelations included: A syndicate of NAB employees taking $2800 bribes for fraudulent home loans with the money exchanged in white envelopes over the counter.
ROUND TWO ON FINANCIAL ADVICE
Spotlight on: The fees-for-no-service scandal, inappropriate financial advice and improper conduct by financial advisers
Companies examined: AMP, CBA, ANZ, Westpac, NAB, Dover Group
Revelations included: AMP lying to ASIC; CBA financial advisers charging dead clients
ROUND THREE ON LOANS TO SMALL BUSINESSES
Spotlight on: Responsible lending to small businesses
Companies examined: ANZ, Bank of Queensland, CBA, Westpac, Suncorp, NAB
Revelations included: Royal commission lawyers backing CBA’s controversial actions after its Bankwest acquisition a decade ago, saying it did not deliberately set out to force Bankwest customers into default and had no ulterior motive to do so
ROUND FOUR ON LOANS TO FARMERS AND ISSUES AFFECTING INDIGENOUS AUSTRALIANS
Spotlight on: Issues affecting people living in remote and regional communities – farmers and indigenous Australians
Companies examined: CBA, Rabobank, NAB, Bendigo and Adelaide Bank, ANZ, Select AFSL, ACBF Funeral Plans, ANZ
Revelations included: ANZ rejected suggestions it was not prepared to deal with significant numbers of farmers facing hard times after its Landmark acquisition. ACBF denied it plays on the significance of funerals in Aboriginal culture to sell insurance policies for children.
Source: Australian Associated Press