Australia's corporate regulator has slammed the big four banks, Macquarie and AMP for "unreasonably delayed" and in some cases "legalistic" fees for no service reviews as customers are still waiting to be repaid after being ripped off in a A$1.5bn scandal.
The Australian Securities and Investments Commission said the big four banks, Macquarie and AMP were yet to complete further reviews of systemic failures that led to the fees for no service scandal - despite being advised to do so as early as mid-2015 - and were using overly legalistic tactics to delay the process.
"These reviews have been unreasonably delayed. ASIC acknowledges that they are large scale reviews - they relate to systemic failures over long periods with reviews going back six to 10 years and cover 36 licensees from the six institutions that currently authorise more than 7,000 advisers However, we believe 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," ASIC Commissioner Danielle Press said in a statement.
These reviews have been unreasonably delayed"
Some of the main reasons for delays by the institutions include poor record-keeping and systems within the institutions, which mean that in many cases they have been unable to access customer files for review, or failures by some institutions to implement customer-centric methodologies to identify and compensate customers. Also, some institutions have taken a "legalistic approach" to determination of the services they were required to provide.
Commonwealth Bank completed its further reviews but told the Australian Securities and Investments Commission in December it would look into whether three of its licensees had extracted fees-for-no-service.
The charging of fees for no service to customers, including dead people, emerged as one of the biggest scandals during the royal commission. In his final report, commissioner Kenneth Hayne said there was a "real question" as to whether some of the cases may have been criminal offences. The fees-for-no-service scandal was like "taking money for nothing", he added.
While CBA is reviewing its three licensees, Macquarie estimates it will complete its review by mid 2019 and AMP in the second half of 2021.
ANZ, NAB licensee JBWere and Westpac licensees Magnitude and Securitor have not given ASIC their proposed target dates for completion.
So far, AMP and the big four banks have set aside more than A$1bn for compensating customers affected by the fees-for-no-service scandal, but ASIC says the reviews are incomplete and in some cases will not be done until the second half of 2021.