Australia’s major banks were lambasted by the Australian Securities and Investments Commission (ASIC) after the banks failed to promptly fix internal systems, according to a report by Reuters. The defective systems led to fees being charged inaccurately, according to the corporate watchdog.
These banks that wrongly charged their customers fees include Commonwealth Bank of Australia, Westpac Banking, Australia and New Zealand Banking Group, National Australia Bank, Macquarie Group, and AMP, Reuters reported.
ASIC said that these companies took a long time in addressing systemic failures.
“These reviews have been unreasonably delayed. The institutions have failed to sufficiently prioritise and resource their reviews, particularly as ASIC advised them to commence the reviews in mid-2015 or early 2016,” said ASIC Commissioner Danielle Press.
Firms taking a “legalistic approach”, poor recording keeping, and failure to set up effective methods to identify and compensate wronged customers were some of the reasons behind the delay, according to the corporate watchdog.
“The four retail banks and AMP had paid or offered a total of about $350 million in compensation for wrongfully charged fees by January 2019, and allowed for further payments (totalling) another $800 million … but noted that those amounts were incomplete,” said Reuters.
ASIC was also planning an enforcement action against an unspecified number of entities for taking customer fees despite not rendering services.
The banking royal commission, which was introduced to investigate and report on misconduct in the banking and financial services industry, also questioned the retail banks and AMP over charging fees.
AMP’s chairwoman, CEO and some of its board left the company after they allegedly interfered with a supposedly independent report to ASIC on the topic.
Macquarie Group, meanwhile, refused to comment on the issue. Representatives of the four retail banks and AMP were not immediately available to give any statement.
