- CBA executive admitted they would take ‘gold medal’ in ripping off customers
- Customers were wrongly charged fees for financial services they did not receive
- Financial services royal commission is currently investigating banking conduct
The Commonwealth Bank has admitted it would be the ‘gold medalist’ of exploiting customers by charging them for financial advice they did not provide.
The frank admission was given by Linda Elkins, Executive General Manager of Colonial First State, a division of CBA, as she was questioned at the financial services royal commission today.
‘You’d be the gold medalist if ASIC was handing out medals for fee for no service,’ claimed Mark Costello, counsel assisting the commission.
Linda Elkins, Executive General Manager of Colonial First State, a division of CBA admitted the bank would be the ‘gold medalist’ at ripping off customers
‘Yes,’ Ms Elkins answered, referring to the fact that between 2007 and 2015 two of CBA’s divisions did not provide financial plan reviews for over 30,000 ‘ongoing service’ customers who were charged annual fees for the service.
Ms Elkins admitted the Corporations Act was breached when Commonwealth Financial Planning Limited and BW Financial Advice Limited, both owned by CBA, failed to provide the services, but that Colonial had not thought to suspend them from using their investment platform.
‘Knowing the action the entity was taking satisfied us we didn’t need to take any further action,’ she said.
The commission heard that the fees were wrongly taken due to either overcharging of ongoing service fees, not allocating advisors to customers who did not have them, or they could find no record the service was provided.
To date CBA has paid more than $118 million in refunds to customers who were incorrectly charged fees.
To date CBA has paid more than $118 million in refunds to customers who were incorrectly charged fees