Some Australian Banks Have Broken Customer’s Trust and Charged Deceased Customers
An investigation carried out on Australia’s banking sector has exposed some profit-driven misconducts which are said to have broken customer trust recent report says. These misconducts include giving clients investment advice which has caused them to lose
$603 million U.S Dollars Fine
Australia’s highest form of the public investigator, the Royal Commission has spent a year investigating allegations of misconduct by some of the biggest banks in the country including its largest lender, the Commonwealth Bank of Australia (CBA).
The first four banks in Australia- Westpac, ANZ, CBA, and NAB reportedly relieved their customers of 178 million Australian dollars (US$126 million) in financial advice they did not provide. The banks allegedly went further to charge customers who had died.
Therefore, wealth managers and the major banks will collectively have to pay A$850 million (the US $603 million) as compensation.
According to a report which was released by Commissioner Kenneth Hayne which has 76 recommendations of which the government has fully endorsed thereby leaving unscrupulous parts of the financial sector prone to being swept away by the legislature, several institutions might have to face criminal charges for charging fees for services not rendered.
The report states:
“Misconduct will be deterred only if entities believe that misconduct will be detected, denounced and justly punished. Misconduct, especially misconduct that yields profit, is not deterred by requiring those who are found to have done wrong to do no more than pay compensation. And wrongdoing is not denounced by issuing a media release.”
The Royal Commission
The Royal Commission was created in response to years of malpractice in the sector and it was initially opposed by Prime Minister Malcolm Turnbull and the banks last year but it went through a bill in parliament. It has reviewed over 10,000 public submissions and interviewed more than 130 hearings which were conducted publicly. The spotlight was placed on customers who had been exploited and bankrupted by banks and industry advisers.