- The Commonwealth waited two years to tell the corporate regulator ASIC there was a problem with the fee for no service.
- The bank’s Count financial planning had a report from Deloitte in 2012 about the lack of systems.
- Yet the bank didn’t send a breach report to ASIC until August 2014.
The Commonwealth Bank knew at least two years before it notified corporate regulator ASIC that it had a problem charging customers for advice they didn’t get, the Financial Services Royal Commission heard.
In the witness chair today again was Marianne Perkovic, executive general manager of Commonwealth Private, who yesterday was warned by royal commissioner Kenneth Hayne to answer questions put to her.
Today Michael Hodge, senior counsel assisting the commission, asked Perkovic if ASIC had been put on a “drip feed” about information on the fees for no service issue.
“As we found issues, we reported them to ASIC,” Perkovic said.
However, it took the Commonwealth two years to report a breach to ASIC.
The Commonwealth’s Count financial planning had a report from Deloitte in 2012 about the lack of systems to monitor whether fees were being charged and there was also a large volume of complaints from customers.
And yet the bank didn’t send a breach report to ASIC until August 2014.
“The intent was always to give ASIC an update once we finished the review by 31 July,” Perkovic said.
After questioning, she said: “What we should have done at this time was actually switch off the fees, and in hindsight, or when we actually went across and remediated, we did compensate for the clients.”
She also agreed with Hodge that collecting fees without providing a service was unlawful.
Overall, the Commonwealth has also offered $118.5 million in refunds to customers to the end of December last year.
This week the royal commission detailed false or misleading statements by AMP to the corporate regulator ASIC about fees it charged customers for advice not given.
The commission has heard, and a senior AMP executive confirmed, a long list of letters, emails and reports showing that the company tried to keep significant information from ASIC.
Australia’s major banks face 15 different major inquiries, including the Royal Commission, following a series of scandals involving giving poor financial advice to customers.
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